How To Understand The Financial Situation Of A Company

Transcription

1 2012 Reference Document Including the annual financial report 0

2 NRJ GROUP 2012 registration document including the annual financial report In accordance with Article of the General Regulations of the Financial Markets Authority [Autorité des marchés financiers], the French version of the present registration document was registered with the Financial Markets Authority on 28 March It may be used in support of a financial transaction if it is supplemented by an offering circular approved by the Financial Markets Authority. The French version of this document was established by the issuer and implicates the liability of its signatories. CONTENTS Introduction Contents of the present document Financial communication Correspondence tables European regulations Annual financial report / Other information Correspondence table (Article 225 of the French Grenelle II Act) Responsible persons and Statutory Auditors Person responsible for registration document Statement by person responsible for registration document Independent auditors Mandates Fees Documents incorporated by reference Presentation - activities and results - important elements (property, subsidiaries and contracts) of the Group and the parent company History and development Simplified Group organisation on 31 December Key figures Historical financial information Intermediate financial information Activity and results Presentation of the business lines and their markets Exceptional events affecting these markets Results of the Group's activities Investments and financing Recent developments and outlook Other information Research and Development Important subsidiaries Real estate

3 2.6 NRJ GROUP parent company Situation and activity of NRJ GROUP during the past financial year and quantified results for the year Recent developments and outlook Research and Development Luxury expenditure Development of investments Information on terms of payment Risk factors and insurance Risks related to the company's business Risks related to economic environment and competitive position Risks related to the economic model Other economic risks Operational, industrial and technical risks Risks related to the production and broadcasting of a radio signal Risks related to the production and broadcasting of a digital television channel Risks related to broadcasting advertising Risks related to information systems Dependency on suppliers Risks related to the organisation of events and shows Environmental risks Magnetic field measurements Other measures for protecting sites and employees Other environmental measures Legal risks Risks related to the regulations Risks related to intellectual property rights Risks related to the content publisher status Risks related to legal disputes, judicial procedures and arbitration Financial risks Insurance and coverage of the Group's risks Property damage insurance Civil liability insurance Executive liability insurance for corporate officers Other insurance: France Insurance for international subsidiaries Corporate social responsibility The Group and its stakeholders Corporate governance and internal references External stakeholders Compliance with the instructions and recommendations of the CSA Relations with listeners and viewers Relations with advertisers Relations with suppliers Sponsorship Employees Workforce and employment Organisation of working time and absenteeism Remuneration

4 4.2.4 Collective relationships Health and safety Training Equality of treatment The environment Energy consumption Electromagnetic waves Other environmental factors Corporate governance Board of Directors General management operating methods Composition of the Board of Directors, mandates and functions of serving directors Observer Remuneration Remuneration paid and options/shares awarded to executive corporate officers Attendance fees and other remuneration received by non-executive corporate officers Share options/performance shares Additional information concerning directors Absence of conviction for fraud, of association with a bankruptcy or incrimination and/or public sanction Conflicts of interest Operations with related parties Other information Report from the Chairman of the Board of Directors on the composition of the Board, the conditions for preparing and organising the work of the Board and on the procedures for internal audit and risk-management Corporate governance Procedures for internal audit and risk management Report of the Independent Auditors on the Chairman of the Board of Directors' report General information concerning NRJ GROUP and its share capital Articles of association and operation Capital and voting rights Capital Authorisations related to increasing the share capital and other approvals Potential share capital Voting rights Breakdown of share capital and voting rights Share buybacks Pure registered shares pledged as collateral Market for NRJ Group shares

5 6.4 Dividends Dividends paid out for previous years Dividend policy NRJ GROUP consolidated financial statements on 31 December Consolidated statement of financial position Consolidated income statement Consolidated statement of comprehensive income Consolidated cash flow statement Statement of changes in consolidated shareholders equity Notes to the consolidated financial statements Independent auditors' report on the consolidated financial statements NRJ Group unconsolidated financial statements: Year ended 31 December Unconsolidated balance sheet Unconsolidated income statement Unconsolidated cash flow statement Notes to the annual financial statements Company's financial results over the past five years Independent auditors report on the annual financial statements Ordinary General Meeting on 28 May Agenda Summary of resolutions Draft resolutions Independent auditors' special report on regulated agreements and commitments

6 INTRODUCTION CONTENT OF PRESENT DOCUMENT Items from the registration document Items from the annual financial report Items from the management report Report from the Chairman of the Board of Directors on the composition of the board, the conditions for preparing and organising the work of the Board and on the procedures for internal audit and risk-management Other Financial Markets Authority (AMF) regulatory information: Independent Auditors' fees, description of share buyback programme FINANCIAL COMMUNICATION Documents accessible to the public The Memorandum and Articles of Association, the minutes of Annual General Meetings, the reports of the Independent Auditors and other corporate documents can be consulted at the Company's head office. Regulatory information and other recurrent information communicated publicly is available on the Group's Internet site: 5

7 CORRESPONDENCE TABLES To facilitate the reading of the present annual report, which is filed as the registration document, the following correspondence table identifies the main information specified by Appendix 1 of "European" Regulation n 809/ 2004 in application of Directive /EC. (na: not applicable) Sections of appendix 1 of "European" Regulation n 809/2004 Page 1 - Responsible persons 1.1- Name and function of responsible persons Certification by responsible persons Statutory auditors 2.1- Name and address of statutory auditors of accounts Appointment situation of statutory auditors of accounts Selected financial information 3.1- Historical financial information Intermediate financial information Risk factors Information concerning the issuer 5.1- History and development of the Company Registered company name and trade name Place and number of registration with Trade and Companies Registry Date of establishment and term of the Company Registered head office, legal status and applicable legislation Significant events in the development of the Company's business , Investments Main investments in 2011 and , Main ongoing investments Main future investments Overview of activities 6.1- Main activities , Category of transactions carried out by the Company New activities developed by the Company , Main markets Non-recurring events Possible dependence , Information serving as the basis for the Company's declarations concerning its competitive position , Organisation chart 7.1- Brief description of Group List of the Company's important subsidiaries , 39, Real-estate, plant and equipment 8.1- Existing or planned significant capital assets , Environmental questions likely to influence use of capital assets Examination of financial situation and results 9.1- Financial situation , Operating income , 113, Factors having an influence on the Company's operating income Significant changes to net revenues or net income Strategies or factors that have influenced or may significantly influence the Company's operations

8 10 - Cash and funding Information on the Company's short and long-term capital , , 116, Source and amount of cash flows ,115, Conditions of borrowing and structure of funding , Information concerning any restriction on use of capital that has significantly influenced or might significantly influence, directly or indirectly, the Company's operations na Expected sources of funding ,115, Research and development, patents and licences , Information on trends Recent trends , Factors that may significantly influence the Company's outlook Profit forecasts or estimates na 13.1-Main assumptions na Independent auditors' report na 14 - Administrative and management bodies Information relative to administrative bodies and the senior management Conflicts of interest at the level of the administrative bodies and senior management , Remuneration and benefits Amount of remuneration paid and benefits in kind granted by the Company and its subsidiaries ,88-89,155, Total amounts provisioned or otherwise recognized by the Company or its subsidiaries for payment of pensions, retirement benefits or other benefits Functioning of administrative and management bodies Expiry date of current terms of office for administrative and management bodies Service contracts binding members of administrative and management bodies Information on the audit committee and the remuneration committee Compliance with the corporate governance system in force in France Employees Number of employees , 154, Employee shareholding and stock options ,81, 129, , 170, , 186, Agreement specifying employee shareholding in the Company's capital na 18 - Main shareholders Shareholders holding more than 5% of equity capital or voting rights Existence of different voting rights , Control of the Company Agreement known to the Company for which the implementation may, at a subsequent date, lead to a change in its control Operations with related parties ,154, Information concerning the capital, the financial situation and the results of the Company Historical financial information Pro forma financial information na Financial statements Audit of annual historical financial information , Statement or report certifying the verification of information , 162, Other information verified by the Statutory Auditors , Non-verified financial information na Date of latest financial information December Intermediate and other financial information na 7

9 Financial information not verified since its publication na Interim financial information concerning the first months of the new year na Dividend distribution policy Amount of dividend per share and any comparison , Legal proceedings and arbitration , Significant change in the financial or commercial situation Additional information Share capital Subscribed capital Shares not representative of capital na Treasury shares , , Convertible or exchangeable securities or those associated with stock warrants Information on the conditions governing all acquisition rights and obligations related to subscribed but not fully paid capital, or covering any company aiming to increase capital na Information on the capital of any member of the Group subject to an option or a conditional or non-conditional agreement placing it under option na Change in number of shares in issue Memorandum and articles of association Corporate purpose Internal regulations of the Board of Directors and its committees Rights, privileges and restrictions associated with shares , Actions required to modify shareholders' rights , Annual General Meeting Clauses relative to change of control Breaches of share ownership thresholds Conditions more strict than the law governing changes to capital na 22 - Important contracts na 23 - Information from third parties, declarations by auditors and declarations of interest na Declaration or report from auditor na Statement from third party na 24 - Documents accessible to the public Information on investments , 39, , 175 8

10 To facilitate the reading of the present document, the following correspondence table identifies, in the present Registration Document, the information constituting the annual financial report that must be published by listed companies in accordance with articles L of the Financial and Monetary Code and of the General Regulations of the Financial Markets Authority. Also given are the chapters corresponding to "regulated information" according to the meaning of article of the General Regulations of the Financial Market Authority. A correspondence table of CSR information (Grenelle II Act indicators) is also included. ANNUAL FINANCIAL REPORT 1. UNCONSOLIDATED FINANCIAL STATEMENTS Chapter 8 2. CONSOLIDATED FINANCIAL STATEMENTS Chapter 7 3. MANAGEMENT REPORT (ACCORDING TO THE MEANING OF THE FINANCIAL AND MONETARY CODE) 3.1 INFORMATION CONTAINED IN ARTICLES L and L OF THE COMMERCIAL CODE Analysis and development of business Chapters 2.4 and 2.6 Analysis of results Chapters 2.4 and 2.6 Analysis of the financial situation Chapters 2.4 and 2.6 Main risks and uncertainties Chapter 3 Summary table of currently valid authorisations granted by the Annual General Meeting of shareholders to the Board of Directors for the purposes of increasing the share capital Chapter INFORMATION CONTAINED IN ARTICLE L OF THE COMMERCIAL CODE Information that may be significant in the event of a public offer Chapter INFORMATION CONTAINED IN ARTICLE L OF THE COMMERCIAL CODE Repurchase by the Company of its own shares Chapter DECLARATION OF PHYSICAL PERSONS WHO BEAR RESPONSIBILITY FOR THE ANNUAL FINANCIAL REPORT Chapter 1 5. REPORTS OF THE STATUTORY AUDITORS ON THE UNCONSOLIDATED AND CONSOLIDATED FINANCIAL STATEMENTS Chapters 7.7 and 8.6 OTHER INFORMATION STATEMENT CONCERNING THE FEES OF THE STATUTORY AUDITORS Chapter CHAIRMAN'S REPORT ON INTERNAL AUDIT AND CORPORATE GOVERNANCE Chapter 5.4 INDEPENDENT AUDITORS' REPORT ON THE CHAIRMAN'S REPORT ON INTERNAL AUDIT AND CORPORATE GOVERNANCE Chapter 5.5 DESCRIPTION OF THE SHARE BUYBACK PROGRAMME Chapter

11 Correspondence table with Decree N of 24 A pril 2012 (article 225 of the Grenelle II act) SOCIETAL INDICATORS Treatment of the indicator RD reference Territorial, economic and social impact of the Company's business Relations with stakeholders In terms of employment and regional development France On local populations France The level of dialogue with these persons or organisations France Partnership or sponsorship activities France Outsourcing and suppliers Honesty of practices Inclusion of social and environmental factors in the purchasing policy The importance of outsourcing and the inclusion of social and environmental responsibility in relations with suppliers and subcontractors Action taken to prevent corruption Measures taken in favour of the health and safety of consumers Other measures taken to promote human rights France France In France, the subject of corruption is covered by the ethics charter. The Group is working on an international roll-out, bearing in mind that it does not have any entities located in "sensitive" countries. France NA: the Group does not implement other measures since it does not operate directly in countries identified as infringing human rights , EMPLOYEE-RELATED INDICATORS Treatment of the indicator RD reference Employment Total headcount and breakdown by gender, age and geographical area France Recruitment and redundancies France Remuneration and pay increases France Work organisation Relation with employees Organisation of working time France Absenteeism France Organisation of dialogue with employees, notably procedures for communicating information, and consulting and negotiating with employees France Statement of collective agreements France The conditions for health and safety in the workplace France Health and safety All agreements signed with unions or employee representatives related to health and safety in the workplace France Accidents in the workplace, notably their frequency and severity, and professional illnesses NC: Indicator not followed at the present time - NA = Not applicable NC = Not communicated NS = Not significant RD = Registration document 10

12 EMPLOYEE-RELATED INDICATORS (continued) Treatment of the indicator RD reference Training Equality of treatment Training policies implemented France Total number of training hours France Measures taken to promote equal treatment of men and women Measures taken to promote employment and the integration of disabled people France France The policy to combat discrimination France Promotion and compliance with the stipulations of the fundamental principles of the International Labour Organisation Respect for freedom of association and the right to collective bargaining The elimination of discrimination in respect of employment and occupation The elimination of all forms of forced or compulsory labour Effective abolition of child labour NA: HR reporting covers France only, where the risk of non-compliance with the ILO's fundamental principles is insignificant ENVIRONMENTAL INDICATORS Treatment of the indicator RD reference Measures implemented by the company to take environmental issues into account and, where appropriate, environmental assessment or certification procedures NC - General policy Employee training and information in the area of environmental protection NS given the nature of the Group's activity - The resources used to prevent environmental risks and pollution The amount related to provisions and guarantees for environmental risks, unless such information is liable to seriously prejudice the company in an ongoing dispute NS given the nature of the Group's activity NA given the nature of the Group's activity - - Pollution and waste management Measures to prevent, reduce or repair air, water and land emissions that seriously impact the environment NA given the nature of the Group's activity Measures to prevent, recycle and eliminate waste France Measures taken in relation to noise pollution and any other form of pollution specific to an activity France Water consumption and supply in accordance with local constraints NS given the nature of the Group's activity Sustainable use of resources Climate change The consumption of raw materials and measures taken to make more efficient use of them Energy consumption, measures taken to improve energy efficiency, and the use of renewable energies Land use Greenhouse gas emissions Adaptation to the consequences of climate change Biodiversity protection Measures taken to preserve or develop biodiversity NS given the nature of the Group's activity NA given the nature of the Group's activity NS given the nature of the Group's activity NA given the nature of the Group's activity France NS: TowerCast is the only activity that may be concerned by this factor NA = Not applicable NC = Not communicated NS = Not significant RD = Registration document 11

13 1Persons responsible and Independent Auditors 1.1 PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT Name and function of the person who bears responsibility for the document Jean-Paul Baudecroux Chairman and Chief Executive Officer 1.2 STATEMENT BY PERSON RESPONSIBLE FOR REGISTRATION DOCUMENT Statement by Responsible Person I declare, after having taken all reasonable measures to this effect, that the information contained in the present registration document is, to the best of my knowledge, accurate and contains no omission likely to alter its substance. I declare, to the best of my knowledge, that the accounts are drawn up in accordance with applicable accounting standards and give a true picture of the assets, the financial situation and the results of the Company and all of the companies included in the consolidation, and that the management report shown in chapters 2, 3 and 6 presents a true picture of the development of the business, the results and the financial situation of the Company and all of the companies included in the consolidation, together with a description of the main risks and uncertainties with which they are confronted. I have obtained a certificate from the statutory auditors, in which they state having audited the information covering the financial situation and the statements given in the present registration document and that they have read the entire registration document. The financial information for the year ending 31 December 2012 was the subject of a report from the statutory auditors given in chapters 7 and 8 of the present registration document. Also, the financial information included by reference, as specified in paragraph 1.4 of this registration document, has been the subject of reports from the statutory auditors which contain comments for the financial year ending 31 December 2010 (cf. the corresponding report on pages 141 and 142 of the 2010 registration document which was filed with the AMF on 31 March 2011 under number D ). Paris, 28 March 2013 Jean-Paul Baudecroux Chairman and Chief Executive Officer Information officer Jean-Pierre Trelat Executive Director Finance and International Business Telephone: +33 (0) Incumbent Independent Auditors Deloitte & Associés Bertrand Boisselier 185, avenue Charles de Gaulle Neuilly sur Seine - FRANCE PricewaterhouseCoopers Audit Laurent Daniel 63, rue de Villiers Neuilly sur Seine - FRANCE 12

14 1.3 INDEPENDENT AUDITORS MANDATES Incumbent Independent Auditors Deloitte & Associés 185, avenue Charles de Gaulle Neuilly sur Seine - FRANCE Represented by Bertrand BOISSELIER PricewaterhouseCoopers Audit 63, rue de Villiers Neuilly sur Seine - FRANCE Represented by Laurent DANIEL *Following the expiry of their predecessors' mandates. Start date of first mandate 27 February 2003* 28 May 2009* End date of mandate Annual General Meeting to approve the accounts for the financial year ending 31 December 2014 Annual General Meeting to approve the accounts for the financial year ending 31 December 2014 Deloitte & Associés and PricewaterhouseCoopers Audit are members of the Versailles regional company of independent auditors. Replacement Independent Auditors BEAS 7-9, villa Houssay Neuilly sur Seine Yves NICOLAS 111, rue de Silly Boulogne Billancourt *Following the expiry of their predecessors' mandates. Start date of first mandate 27 February 2003* 28 May 2009* End date of mandate Annual General Meeting to approve the accounts for the financial year ending 31 December 2014 Annual General Meeting to approve the accounts for the financial year ending 31 December 2014 BEAS and Mr Yves Nicolas are members of the Compagnie Régionale des Commissaires aux Comptes de Versailles FEES Fees of the Independent Auditors and members of their networks borne by NRJ GROUP and its subsidiaries (net of tax and costs) for the financial years ending 2011 and 2012: Deloitte & Associés PricewaterhouseCoopers Audit Amount % Amount % Audit Auditing, certification and examination of annual and consolidated financial statements - NRJ GROUP % 42% % 32% - Fully consolidated subsidiaries % 58% % 35% Other checks and services directly related to the duties of independent auditors - NRJ GROUP % - Fully consolidated subsidiaries Subtotal % 100% % 100% Other services provided by the networks of fully consolidated subsidiaries - Legal, taxation, corporate - Other Subtotal TOTAL % 100% % 100% These services concerned the checks performed for a disposal project. 13

15 1.4 DOCUMENTS INCORPORATED BY REFERENCE In accordance with Article 28 of European regulation n 809/2004 dated 29 April 2004, the present registra tion document incorporates, by reference, the following information, to which the reader is invited to refer: For financial year ending 31 December 2011: the consolidated and unconsolidated financial statements and related reports from the Independent Auditors shown in the registration document registered on 30 March 2012 with the Financial Markets Authority (N D ), respectivel y on pages 98 to 146 and 147 to 169. For financial year ending 31 December 2010: the consolidated and unconsolidated financial statements and related reports from the Independent Auditors shown in the registration document registered on 31 March 2011 with the Financial Markets Authority (N D ), respectivel y on pages 91 to 142 and 143 to

16 2 PRESENTATION - ACTIVITIES AND RESULTS - IMPORTANT ELEMENTS (PROPERTY, SUBSIDIAR- IES AND CONTRACTS) OF THE GROUP AND THE PARENT COMPANY 2.1 HISTORY AND CHANGES HISTORICAL REMINDER Birth of NRJ. Birth of CHERIE FM. NRJ in Switzerland and in Belgium. NRJ on the Secondary Market of the Paris Bourse. RIRE & CHANSONS in Ile-de-France. NRJ in Berlin. 3 new NRJ stations in Germany. NRJ in Sweden. NRJ on Monthly Settlement with the Paris Bourse. 14 new NRJ stations in Sweden and launch of NRJ in Helsinki. RIRE & CHANSONS nationally. NRJ in Vienna and Oslo. NRJ purchases 80% of NOSTALGIE. 7 new NRJ frequencies in Finland. NRJ on the Primary Market of the Paris Bourse. All assets grouped within NRJ GROUP. NRJ in Denmark. 3 new NRJ stations in Norway. NRJ holds 100% of NOSTALGIE. NRJ becomes the number 1 radio station in France by aggregate audience over September October 2002 (*). NRJ acquires 49% of Radio Z AG, in Zurich. Introduction of NRJ 12, national free digital television channel. Introduction of NRJ MOBILE, virtual mobile telephone operator. Launch of first web radios. Introduction of NRJ HITS, cable, satellite and ADSL music channel. Introduction of NRJ MOBILE and C le Mobile mobile telephony subscription offers. Change of management mode by adoption of the status of limited company with Board of Directors, and appointment of Jean-Paul BAUDECROUX, main shareholder and founder of the Group, as Chairman and Chief Executive Officer. Refocus on radio, TV and Internet media. Introduction of NRJ PARIS. Reduction of NRJ GROUP's holding in NRJ MOBILE from 50% to 10% and continuation of the activity under licence. In response to an unprecedented worldwide financial and economic crisis, the Group has been protecting the margins in its historical activities (Music Media and Events and International) by cost-saving measures and is continuing to develop its growing activities (particularly Television and Broadcasting). Launch of applications for listening to radio over the mobile Internet. Strong growth in earnings set against a historical increase in the NRJ station's audience figures over the second half of the year and record audience levels for NRJ 12, NRJ HITS and NRJ PARIS on television. Sale of the local television channel 7L (Montpellier). Continuation of the strong development of the TV division and particularly the NRJ 12 channel in the context of the switch-off of the analogue television signal in France. Strong development of towercast, the Group's broadcasting subsidiary. NRJ in Greece and NOSTALGIE in Portugal. NRJ was the leading radio channel in France according to the Médiamétrie April-June 2012** survey. Introduction of CHERIE 25, the Group's second largest free national digital television channel. Introduction of the 200th webradio. (*): Survey 75,000 + Médiamétrie-surveys September-October 2002 aggregate audience Monday-Friday-5:00/24:00 Target 13 years and + (**): Radio survey 126,000 + Médiamétrie-surveys April-June 2012 aggregate audience Monday-Friday-5:00/24:00 Target 13 years and + 15

17 2.2 SIMPLIFIED GROUP ORGANISATION STRUCTURE AS AT 31 DECEMBER 2012 % controlled Radio Compagnie Musicale de Diffusion 100% NRJ NRJ GROUP 100% 100% A list of the consolidated companies on 31 December 2012 is shown in note 33 of the notes to the consolidated financial statements. The percentages of control shown in this list were unchanged on 28 March 2013 with the exception of that of Frankfurt Business Radio GmbH & Co. Betriebs KG, part of whose shares were sold and are no longer consolidated. NRJ network 1 subsidiary 4 equity affiliates 3 joint ventures Radio Nostalgie Nostalgie network 1 subsidiary 2 equity affiliates 99.99% Chérie FM 100% Chérie FM network 3 subsidiaries 2 equity affiliates 1 joint venture 100% Rire & Chansons National advertising agency 99.89% NRJ Global Local advertising agencies 100% Advertising Networks 1 subsidiary, 1 joint venture Broadcasting 1 foreign subsidiary towercast 100% Internet 100% e-nrj Events, Shows and Other Productions Television 100% NRJ Music 100% 100% NRJ Publishing NRJ Entertainment 4 subsidiaries 100% NRJ 12 1 equity affiliate 75% Société de Télévision Locale 1 equity affiliate 20% 100% 100% Boileau TV 1 subsidiary 1 subsidiary 100% Chérie HD 1 participation Other activities 100% 99.90% 100% 2 subsidiaries 1 subsidiary SCI Pompignane 100% NRJ Audio 0.10% 99.99% NRJ Production International (NRJ/Energy and Nostalgie/Nostalgia networks) 100% Switzerland: Energy Branding SA Finlande Allemagne Suède Norvège Suisse 100% 100% 100% Autriche 100% Belgique 100% 100% 100% NRJ Finland Oy AB Radio NRJ GmbH NRJ International Operations GmbH NRJ Radio Beteiligungs GmbH NRJ Belgique SA RBS Broadcasting AB Energy Holding Norway AS 99.95% NRJ Holding Suisse SA 10 subsidiaries / 4 affiliates 7 subsidiaries 1 joint venture 6 subsidiaries 2 equity affiliates 1 branch Nostalgie SA 1 equity affiliate 50% 16

18 NRJ GROUP is the Group's parent company. Its income comes essentially from invoicing for services management fees performed on behalf of the Group's French companies, brand licensing royalties and dividends received from its direct subsidiaries. The main commercial relationships during the 2012 financial year between the different companies of the Group were as follows: marketing, by NRJ GLOBAL SAS, of the national advertising space for the Group's four radio stations, Internet sites, events and television advertising, marketing in France, by REGIE NETWORKS SAS and its subsidiaries, of the local advertising space of radio stations authorised in category C by the Conseil Supérieur de l'audiovisuel [higher council for the audiovisual sector], of local Internet spaces and local events, partial broadcasting by towercast SAS of the programmes of the Group's four radio channels, of NRJ 12 SARL (NRJ 12 programme) and of CHERIE HD SAS (CHERIE 25 programme), leasing, by NRJ PRODUCTION SAS, of buildings in the Ile-de-France region belonging to companies of the Group having their head offices there, provision, by NRJ AUDIO SAS, of IT and audiovisual technical services on behalf of French subsidiaries of the Group, concession, by NRJ GROUP, of the licence for the NRJ/ENERGY brands to NRJ SAS, provision, by NRJ GROUP, of services for the benefit of the French subsidiaries of the Group. 2.3 KEY FIGURES HISTORICAL FINANCIAL INFORMATION Income statement (in million euros) Change (%) Revenues % Of which dissimilar barters % Revenues excluding dissimilar barters % Current EBIT before dissimilar barters % Current EBIT / revenues (excluding dissimilar barters) 16.2% 16.2% Current EBIT % Non-recurring operating income and expenses N/A Financial income % Corporate income tax (24.7) (19.3) +28.0% Share in income of associates (0.4) (0.2) % Consolidated net income % Including minority interests % Including net attributable profit % The definition of the above key indicators is given in the notes attached to the consolidated financial statements, in chapter Accounting Principles and Policies, in sections to (na: not applicable) 17

19 Consolidated balance sheet (in million euros) Goodwill Property, plant and equipment and intangible assets Investments in associates Non-current financial assets Non-current assets (excluding deferred tax and net of debts on fixed assets) Inventories Trade and other receivables Trade and other payables (145.3) (145.7) Working capital requirement (excluding net debts on fixed assets) Net tax liabilities (current and deferred) (25.3) (33.7) Provisions (16.0) (16.6) Taxes and provisions (41.3) (50.3) Non-current borrowings (1.9) (0.7) Current borrowings (0.0) (0.1) Cash and cash equivalents Net cash surplus Shareholders equity Total assets Total liabilities (697.1) (686.4) Consolidated cash flow (in million euros) Gross free cash flow before net debt servicing costs and taxes Taxes paid (30.4) (23.9) Change in working capital requirement (13.8) (0.1) Net cash flows generated by the business Disbursements relating to acquisitions of fixed assets (31.9) (33.9) Receipts related to the disposal of fixed assets Net cash flow assigned to investments (30.7) (31.3) Dividends paid by the parent company (23.8) (24.3) Receipts linked to new borrowings net of repayments 0.2 (0.3) Net (acquisitions) disposals of treasury stock 0.5 (16.4) Other flows relating to financing activities Net cash flows assigned to funding transactions (21.4) (39.2) Impact of the variation in exchange rates Change in current cash flow (10.2) (15.1) INTERIM FINANCIAL INFORMATION Nil 18

20 2.4 ACTIVITY AND RESULTS Presentation of the business lines and their markets NRJ GROUP is one of the main private French media groups and an international player established in 22 other countries, either through direct establishment or via contracts to license the NRJ/ENERGY brand, the number one international radio brand, and/or NOSTAL- GIE/NOSTALGIA. In France, the Group is a leader in the private radio market and one of the new players in the television market. The Group is also a growing player in the market for radio broadcasting through its subsidiary towercast SAS, which is the number 2 operator in the French broadcasting market. NRJ GROUP is in the business of publishing, producing and broadcasting, and markets its own media spaces. For several years, it has been supported by the strength of its radio media and its brands NRJ, NOSTALGIE, CHERIE FM and RIRE & CHANSONS, by its marketing expertise and by its commercial power, in making use of new media, particularly in television as well as ancillary activities in partnership such as mobile telephony in order to follow and anticipate developments in consumption and offer a wider range of advertising services to its clients. PRESENTATION OF MEDIA ACTIVITIES The Group's core business consists of creating and developing media, whether it be radio stations, television or the Internet. In this context, the programmes and content broadcast by the Group aim to capture the widest audience, meaning the largest number of listeners, viewers or Internet users. Thus, nearly 84% of consolidated revenues in 2012 came from selling advertising space or screens to advertisers wishing to promote a message, product or brand with a wider audience. The Group's revenue therefore mainly comes from advertising investment in the media. In 2012, the net advertising revenues market reached EUR 13.3 billion euros in France, representing a decline of 3.5% based on the new IREP survey scope (Source IREP France Pub 2012): After a drop in media investments in 2008 and 2009, the advertising market grew by about 2.9% in 2010 and 0.1% in 2011 based on the former scope of the IREP survey (Source IREP France Pub). (In million euros) 2012 Change 2012/2011 Television 3, % Press 3, % Outdoor advertising 1, % Radio % Internet "display" % Internet "search" 1, % Mobile "display" % Directories % Cinema % Advertising mail* 1, % Address-free advertising* % TOTAL 13, % * Only includes distribution revenues, excludes production and advisory services. Source IREP France Pub 2012 Each medium may outperform or underperform the general media market trend from year to year, according to the choices made by advertisers. Generally, visibility in the advertising market is low and depends on the economic health and dynamism of advertisers and therefore on the international and national economic environment. The Group's competitive position in each of the media markets in which it is present also depends on the audience, or audience share, that it develops. It may therefore outperform or underperform the positive or negative advertising expenditure trends observed for a medium, depending on whether its audience share increases or decreases. Among the media, radio is the Group's main business line, in which it is the leader in France and where it has achieved a high level of profitability. In particular, in television, the Group is developing a national channels division, which requires significant investment before reaching balance. In 2012, the Group was granted a new free national channel which will require significant investment before reaching breakeven. On the Internet, but to a lesser extent, the Group is currently investing to develop a service allowing the consumption of its media over the Internet and mobile Internet. In general, the business of media publisher is based on an economic model with a high proportion of fixed costs, meaning costs not directly related to revenue. Therefore, any variation in revenue can have a strong impact on the results, assuming stable fixed costs. The Group points out, however, that a certain number of these fixed expenses may change in line with the resources that the Group wants to allocate to its activities or the general evolution of the price of goods and services purchased by the Group, or based on indexation rates for expenses that are index-linked, such as broadcasting charges. With regard to the latter, note that a significant share of the Group's radio broadcasting and a minority share of its TV broadcasting is carried out by one of its wholly-owned subsidiaries, towercast SAS. Concerning advertising revenues, visibility is limited to a few weeks, or even a few days, particularly for very responsive media such as radio or the Internet. In these media, the time frame and cost for preparing advertising campaigns is low, which allows advertisers to implement, or cancel, advertising campaigns within a few days. Among the variable costs that the Group is obliged to acknowledge, particularly in relation to the radio business in France, in application of Article L of the Intellectual Property Code, is fair remuneration for performing artists and producers of sound recordings, in return for programmes broadcasting sound recordings published for commercial purposes, to which the holders of related rights cannot object. 19

21 This legal licence was extended by an act dated 1 August 2006 to the reproduction performed by or on behalf of audiovisual communication companies in order to play their own programmes broadcast on their channels. This remuneration, calculated as a percentage of turnover, is collected by the "Société de Perception de la Rémunération Equitable" (SPRE). From 1 January 2008, the scale for the radio activity has been the result of a decision by the commission created by Article L of the Intellectual Property Code, dated 15 October 2007, published in the Official Journal on 6 November 2007, and for television, a decision by the same commission dated 19 May 2010 effective from 1 July 2010 (also see section 3.1 Risks related to the company's business). The Group is also obliged to remunerate those holding the title to works in collections held by performing-rights societies, which are the SACEM, the SACD, the SCAM and the SDRM and, in certain cases, the producer companies (SCPP and SPPF), with which it has agreed, according to the activities concerned, general contracts for performance and reproduction, for authorisation to broadcast the works in their collections in consideration of payment of a fee calculated as a percentage of advertising revenues. Also, the Group carries out all appropriate negotiations with the companies that collect fees for copyright and related rights, according to the evolution and development of its activities, particularly on the Internet. In television, in application of law n d ated 25 December 2007 concerning the modernisation of audiovisual broadcasting and future television, the Group is liable for the COSIP (account in support of the audiovisual programmes industry) tax. This tax, calculated as a percentage of revenues, is applicable to television channels broadcasting works eligible for support by the Treasury's "Cinema audiovisual and local radio expression" special assignment account and, since 1st January 2009, works eligible for support from the national cinematographic centre (CNC). Also, law n dated 5 March 2009 relative to audiovisual communication and the new public television service, promulgated on 7 March 2009, established a new tax on the advertising revenues of television channels after deduction of amounts paid for the COSIP tax and after an allowance of 4% (see section below Risks related to regulations Television). Radio Concerning the radio medium in France, the Group is the leading private group in a highly competitive market in which the players are of different sizes and types: generalist stations and musical stations, independent stations and those belonging to media groups, commercial stations and public stations, networks of national and local radio stations. The public radio service is provided by three companies: Radio France, Réseau France Outre-Mer (RFO) and Radio France Internationale (RFI). In mainland France, Radio France oversees national radio stations and regional or local stations (Source: website of the Conseil Supérieur de l Audiovisuel). In the private sector, there are currently about 900 operators licensed to transmit in the FM band on 4,700 frequencies. These licenses are delivered by the Conseil Supérieur de l'audiovisuel for 5 years, renewable twice. After this, the Conseil launches a new call for tenders. The Conseil Supérieur de l'audiovisuel has determined five categories of radio, according to their intended coverage, local or national, and their content, relating to a particular subject or generalist. Each category is designated by a letter (from A to E). There are also the motorway radio stations, which constitute a separate category. All of these categories structure the national radio landscape (Source: website of the Conseil Supérieur de l Audiovisuel). In order to broadcast its programmes in France, at the end of 2012, NRJ GROUP had 857 licenses to transmit, including 63 operated by franchise holders (see section Risks related to regulation). The Group has thus developed three networks in numerous towns in France, which allows it to broadcast not only national programmes to a large share of the French population, but also, in the towns where the Conseil Supérieur de l'audiovisuel has granted authorisation to transmit in category C (294 licences for NRJ, NOSTALGIE and CHERIE FM including repeater stations and franchised stations) to broadcast programmes of local interest. The Group thus has the option of marketing spaces for national, multi-local or local advertising. As for RIRE & CHANSONS SAS, in the regions, it only has licenses to transmit in category D, allowing it to broadcast its national programme only. Over the long term, we see that revenues from the Group's radio business changes primarily according to the general trend in advertising investment in radio, and also according to its audience share and its commercial dynamism. In 2012, in an advertising investment market that fell by 3.5% in relation to 2011 according to IREP data, radio advertising investment fell by 1.2% to a net EUR 739 million. The revenues of the Group's Music Media and Events division fell by 5.5% (-5.7% for the radio activity alone) to EUR million. Conversely, in 2011, when the advertising market was stable, radio advertising investment rose by 0.6% and the revenues of the Group's Music Media and Events division rose by 4.1% (+3.5% for the radio activity alone). In terms of audience, the Group has a "balanced" portfolio of music radio stations built around 4 strong brands, and is ranked among the leaders. The Group's four radio stations, whose positionings cover a large share of the population in terms of age and sex, represented an aggregate audience share of 22.7% and an average audience share of 14.8% in 2012 (Source: Médiamétrie, 126,000 radio, target 13 years and over, from 05:00 to 24:00, Monday to Friday). 20

22 Over the long term, the aggregate audience of the main national private commercial radio stations has changed as follows (source Médiamétrie, target 15 years and over until April-June 2002, then target 13 years and over, from 05:00 to 24:00 from Monday to Friday, in thousands of daily listeners): Television In television in France, the Group is developing two free national channels (NRJ 12 and CHERIE 25), one cable, satellite and ADSL channel (NRJ HITS) and one local channel in the greater Paris region (NRJ PARIS). The main source of revenues to date is NRJ 12, one of the new national Digital Terrestrial Television (DTT) channels introduced in March 2005, which has been growing strongly. CHERIE 25 was introduced on 12 December It is one of the six new high-definition digital channels allocated by the Conseil Supérieur de l Audiovisuel on 27 March Terrestrial coverage of the French population by these new channels stood at around 40% at the start of 2013 and is expected to exceed 97% by mid-2015, based on the roll-out schedule set by the Conseil Supérieur de l Audiovisuel. After the switch-off of the analogue signal in November 2011, DTT has been the only terrestrial television broadcasting network in France. After the allocating of the six high-definition channels, there are now 32 national channels, of which 7 free public channels, 17 free private channels and 8 paid channels (including Canal +). There are also many local and regional channels in mainland France and its overseas territories. The Conseil Supérieur de l'audiovisuel regulates the use of radio frequencies and assigns frequencies to the various channels through a licensing procedure, which in particular takes into account their contribution to the television offering. These channels are grouped into multiplexes. The public television sector in France has, since the act dated 5 March 2009, been grouped within a single company, France Télévisions, which publishes the national television services France 2, France 3, France 4, France 5 and France Ô. Added to this are the local stations and the regional television services of France 3 and the "la 1ère" overseas network. Among the 17 free private sector terrestrial channels are 2 historical channels, 9 new channels that entered the DTTV market in 2005 and 6 new HD channels that entered the market in Finally, alongside terrestrial digital television, channels are also broadcast on other networks: cable, satellite and ADSL, for which 210 service agreements or declarations exist. (Source: website of the Conseil Supérieur de l Audiovisuel) In this new television environment, unlike the leading historical channels, the audience share of the new DTT channels increases strongly in accordance with improvements in their programming schedules and as 21

23 DTT reception progresses over the national territory. Concerning NRJ12, its average national audience share stood at 2.4% in 2012 against 2.3% in 2011 and 1.9% in Against this favourable background, the Group's market share in the television market is strongly increasing and revenues from the television division increased by 7.5% between 2011 and 2012, going from EUR 77.7 million to EUR 83.5 million. This performance was achieved despite a difficult market in 2012 and a fall in television advertising investment in the same year. This market, which represents nearly EUR billion of net investment, fell by more than 4.5% compared with 2011 (source IREP- France Pub 2012). Change in annual national audience share for DTT channels in % (Source Médiamétrie Médiamat - target 4 years and older): Commercial DTT channels introduced in ,5 3,3 3,6 3,0 3,4 3,2 2,6 2,5 2,4 2,3 2,3 2,0 1,9 1,5 1,4 2,3 2,0 2,1 2,1 1,6 1,6 1,4 1,1 1,9 1,8 1,4 1,2 1,0 0,9 0,7 0,7 1,2 0,8 0,7 0,5 0,8 1,8 2,2 2,1 1,9 TMC W9 NRJ12 Direct 8 / D8 France4 NT1 BFM TV Direct Star I>TELE Gulli Historical channels 26,1 24,5 23,7 22,7 16,7 16,1 14,9 14,9 11,2 11,8 10,810,4 10,8 10,7 9,7 9,7 3,5 2,9 3,1 3,2 3,3 3,1 3,1 3,1 1,7 1,6 1,5 1,8 TF1 France2 M6 France3 France5 Canal+ Arte The Group does not yet have audience data related to CHERIE 25 for all of France. Nevertheless, the first audience results from those with access to the channel, which were published in March 2013, are encouraging: 60% of the channel's audience are women aged 15 and over, and 0.4% are women under 50 responsible for purchasing (Source: Médiamétrie, Médiamat, CHERIE 25, Consolidated audience data from 31/12/2012 to 03/03/2013, Base 4+ initialised in CHERIE 25, Monday to Sunday, , TME audience share and average rate structure). The Group is also developing NRJ HITS, another national channel on cable, satellite and ADSL. This music channel, launched in March 2007, is the number 1 music channel on Cable, Satellite and ADSL, coming in ahead of MTV, with more than 6.7 million viewers each month according to the latest Médiamétrie Médiamat'Thematik survey (period 24), carried out from 03 September 2012 to 17 February Lastly, the Group is also developing NRJ PARIS, one of the four regional DTT channels in the Paris region, which was launched in March NRJ PARIS is the leading local DTT channel in the Paris region with more than one million viewers per week and an average audience share per fifteen minutes up by 48% year-on-year (Source: Médiamétrie, Local TV survey, September-December 2012, Base age 15+ with a TV in the Paris region. Annual progression per average fifteen minutes September-December 2012 vs September- December 2011). 22

24 International Business The group's international activities represented nearly 11% of consolidated revenue in The group is developing using its musical know-how and its brands NRJ/ENERGY and NOSTALGIE/NOSTALGIA. The Group manages different modes of operation according to the country or geographical zone: The Group has transmission licenses that it operates directly or via partnerships in Germany, Austria, Belgium, French-speaking Switzerland, Sweden, Norway and Finland. The business in Germany represents nearly half of the Group's international business. There, the Group operates the NRJ/ENERGY brand in 6 regions (Länder). The Group is also present through brand licensing contracts in German-speaking Switzerland, Bulgaria, Canada, Denmark, Lebanon, Russia, Ukraine, Greece, Portugal and sub-saharan Africa. In the countries where it is present, the Group has a limited market share, particularly in the German-speaking zone. Internet On the Internet in France, the Group is not only developing conventional websites, showcases for radio stations and television channels but also an additional radio player and web radio service as well as a television replay offering. The Group's web radio offering has grown significantly, reaching 200 web radios in 2012, the aim being to offer listeners free access to many different musical genres, suitable for different occasions and different generations. The are available over the Internet at home, in the office or while roaming, through applications downloaded to smartphones and tablets: "200 web radios accessible anywhere, anytime". Concerning the sites providing images and content, these aim to develop an audience through an economic model based on advertising. The market based on the advertising model is largely dominated by the search-engine sites and by the sites attracting the largest number of monthly unique visitors according to the Médiamétrie//NetRatings ranking, as used by advertisers. Out of these 8 Internet sites, the Group had more than 3.9 million unique visitors in January The nrj.fr site is the number 1 music radio site in France according to Médiamétrie (Source Médiamétrie//Netratings, January 2013, domain nrj.fr, leadership based on an ad hoc ranking of the audience ratings of musical radio station websites, web users aged 2+, everywhere). Regarding the web radio offering, since the start of 2013, the Group has had 206 web radios available through the radio websites or via the 7.4 million applications downloaded on iphone, ipod Touch, ipad, Androïd, Nokia, Samsung, Windows Phone 7, HP Palm and Galaxy Tab (Source - Apple, Microsoft, Google, Samsung, Nokia, LG, Motorola, Asus and HP Palm as at 03/02/2013). The Group's web radios recorded more than 36.3 million sessions in February 2013 (Source - AT Internet Xiti, February 2013, visits on premium players and web radios, on websites, mobile handsets and tablets). In addition to the radio and TV range on the Internet and mobile Internet, via computers, tablets and other mobile terminals, the Group is also continuing the development of its applications for connected TVs, particularly with the use of interactive additional services such as "NRJ 12 replay" for catch-up TV and the brand's web radios. NRJ is currently the radio/tv publisher that is best represented, both in the HBBTV European standard and on the various proprietary portals, amongst all the major television brands: The catch-up offering is also available via the various cable and ADSL operator set-top boxes. The Group is thus pursuing the development of its Internet business and gradually adapting its services to technological developments. The prospects in these new markets appear favourable. Nevertheless, at this stage, the revenues related to the Internet business remains barely significant on the scale of the Group. ADVERTISING AGENCIES In France mainly, the Group markets its advertising space itself through powerful national and local advertising departments employing nearly 380 sales people, more than 290 of whom are located regionally. ADVERTISING SECTORS The main advertising sectors differ in terms of media used and vary according to their communication requirements and applicable regulatory constraints: for example, beauty products are usually advertised on television while cinema advertising on television is prohibited. In the Group's radio activity, the three largest advertising sectors are Retail, Transport (notably automotive) and Services (notably Banking and Insurance), which accounted for around 62% of national advertising revenues in In television, the three largest advertising sectors are Food and Beverage, Beauty-Pharmacy and Transport (Automotive notably), which accounted for around 45% of national advertising revenues in Thanks to the development of its television activity, the Group's advertising revenues are more balanced in terms of their sector weighting. 23

25 Definitions according to Médiamétrie RADIO AND TELEVISION Aggregate audience (AA): Audience indicator for radio and television. This is the number or percentage of persons having had at least one contact with the media in question during the period (time range, day, week, etc.), whatever the duration. The aggregate audience relates to the duration of listening time: aggregate audience (as a percentage) = DLI / DLL. DLI or Duration of Listenership per Individual: audience indicator for radio stations or television channels. Average time spent listening to radio or watching television by an individual component of the population or the sub-population in question. It may be calculated for a programme, a time range or an entire day. It is expressed in minutes. DLL or Duration of Listenership per Listener: audience indicator for radio stations. Average time spent per listener, listening to a programme, station or radio media, over a time range or throughout the day. It is expressed in minutes. The term DLL is sometimes used for television (however, it is preferable to speak of Duration of Watching by Viewer). Audience share: percentage of audience for a media (radio station, television channel) or a group of media (aggregates, joint deals), calculated in relation to the audience for the media or for a sub-group (e.g. generalist programmes): This indicator may be calculated for a programme or a time range and by target. Synonym: market share. INTERNET Unique visitors: total number of individuals having visited a web site or used an application at least once over the period in question. Individuals who have visited the same web site or used the same application several times are only counted once. BROADCASTING Born of the Group's desire to perform its own radio broadcasting, the broadcasting activity was first developed as the Group's radio stations were established, and was then opened to external clients. This activity is performed by towercast SAS, a wholly-owned subsidiary of the Group. Its business model involves marketing broadcast services, essentially FM radio and DTT in France, using a dense network of aerials and technical audiovisual equipment. At the end of December 2012, this technical infrastructure was installed on 624 sites spread throughout France including 40 sites wholly owned by towercast SAS, the other sites being rented from various lessors and TDF. In FM, the network developed by towercast SAS covers about 85% of the French population (band II). The contract term is five years. Historically in FM, the rate of turnover of contracts at the end of the period is less than 5%. It is therefore a business that is stable over time and which offers good visibility concerning revenues. In DTT, the period of contracts in the market is five years. Generally, in radio as in television, towercast SAS regularly invests in its infrastructure (i.e. aerials, buildings housing the electronics, electrical installations, etc.). Currently, taking advantage of the pursuit of the deployment of DTT, towercast SAS is investing significantly in new infrastructures. OTHER BUSINESS As stated previously, other entertainment activities are not individually significant on the Group scale, with the exception of the business producing or co-producing live shows, particularly the activity of co-producing large-scale musicals. This activity consists, for the Group, in co-producing shows in association with professionals in the production of shows and musicals, and therefore designing and finalising a scenario and a choreography, composing and selecting the music, selecting the artists, manufacturing the decor and costumes, etc. Income mainly comes from the sale to the general public of tickets giving access to the venues where the musical is performed. To date, the three musicals co-produced by the Group over the last six years (the last musical "1789 Les Amants de la Bastille" is still showing) have had commercial and economic success, particularly for the musical "The Sun King", which reached a very high level of profitability due to its considerable commercial success and a controlled production budget. Musical co-production is a non-recurring activity: there was no musical in 2011 and the activity was not significant in 2010 since performance of the musical "Cleopatra the last Queen of Egypt" closed in January 2010) EXCEPTIONAL EVENTS AF- FECTING THESE MARKETS The markets in which the Group does business, their regulations, and their competitive and technological environments, are constantly changing. The risks related to the economic environment, regulatory and technological constraints and their developments are described in section 3.1 Risks related to the company's business and section 3.4 Legal Risks. Excluding developments in the normal course of its activities, there were no exceptional events significantly affecting the Group's markets RESULTS OF THE GROUP'S AC- TIVITIES Highlights In 2012, despite a contraction in the advertising market in France, NRJ GROUP saw an increase in current EBIT. Such a remarkable performance in a difficult economic environment reflects: continued strong profitability in radio and continued strong growth in the NRJ station's audience ratings, a continuation of the Group's development in free national television with the successful launch of CHERIE 25 and a slightly positive current EBIT for the NRJ 12 + NRJ HITS national channels division, despite a particularly difficult television market, strong growth in revenues on the international activities, in particular positive current EBIT in Germany after several years of losses, growth in the NRJ MUSIC label and the success of the musical "1789 Les Amants de la Bastille", solid growth in the current EBIT of towercast SAS, the Group's broadcasting subsidiary. 24

26 Music Media and Events division: uninterrupted growth in the audience ratings of the NRJ station Radio, a powerful media At the end of 2012, according to the latest audience survey carried out by Médiamétrie over November- December, radio was confirmed as a powerful media. It is listened to every day by more than 43.3 million people aged 13 and over, i.e. 82.3% of the French population, for a duration of 2 hours and 58 minutes. On average in 2012, there were nearly 500,000 new listeners each day in relation to the previous year (1). The Panel Radio Premium survey for published by Médiamétrie also confirms that, for the radio season from September 2011 to June 2012, 93.9% of French people aged 13 and over listened to the radio over a period of 3 weeks. For 57.3% of listeners, music is still their main reason for listening to the radio. Radio stations further strengthened at the end of summer 2012 In 2012, the Group continued the groundwork that was begun previously on developing the audience for the NRJ station and recovering audiences for its other stations. In this context, resources for the radio stations were enhanced and studies were carried out on each brand and on the programming of the radio stations, to prepare and optimise the programme schedules for the post-holiday period at the end of August At the end of 2012, after mixed audience trends by station, a total of more than 12 million listeners aged 13 and over listened to one of the Group's stations each day (2). Concerning the NRJ station, the musical programming and the programme schedule continued to develop. At the end of the holidays in September, the station optimised its 6/9 morning format which is hosted by MANU, along with STEPHANIE and ORIANNE, and continued to successfully produce the evening programme hosted by Sébastien CAUET. CHERIE FM innovated its offering, and now is the only national musical radio station with a multi-local morning programme: its listeners in cities around France simultaneously awake to local content. The channel continued to revamp, and now offers an optimised musical schedule and a new logo that fits with the new free DTTV channel CHERIE 25. NOSTALGIE continued to work on its music programme schedule. The station's overhaul is expected to be completed in 2013 to allow the station adopt a September schedule designed to conquer new audience share. RIRE & CHANSONS optimised its offering and its events segment by organising a monthly springboard for new comedians at a prestigious Parisian venue. In 2012, the entire programming schedule underpinned this success. The morning show, MANU DANS LE 6/9, the evening show hosted by SEBASTIEN CAUET from to and the musical slots from 9.00 to all recorded growth in audience share for each period published by Médiamétrie (5). In the period November- December 2012, all indicators showed a further increase in relation to both the previous period and the previous year (6). Nearly 6.2 million listeners a day currently listen to NRJ, which is the highest audience level recorded by the station in seven years (7). Audience ratings of the other stations in 2012 At the end of 2012, CHERIE FM saw record growth (9) with all indicators showing a year-on-year increase (8) in the November-December 2012 period published by Médiamétrie. CHERIE FM has more than 2.2 million listeners each day (10) and still has the biggest female listenership in France with 60% of women listening to it (11). The local morning programmes notably gained more than 120,000 new listeners in a year (12). The Group's other two stations showed mixed trends in NOSTALGIE had more than 3 million listeners each day in 2012 (13). It showed mixed results over the year, but in the November-December 2012 ratings published by Médiamétrie it is still the second favourite musical station in the age category (14). Finally, RIRE & CHANSONS became the favourite among male listeners in France with an average of 77% of men listening at any one time in 2012 (15). Based on the November-December 2012 period published by Médiamétrie, it had 1,767,000 listeners each day (16). Audience leadership on key commercial targets NRJ GLOBAL, the Group's advertising department, offers a commercial audience grouping nearly 12 million daily listeners (3) and the latest audience results in 2012 confirmed the leadership of NRJ GLOBAL's service on the key commercial target of those between 25 and 49 years old (17). The power of the audience on the key years old commercial target is a strength of NRJ GLOBAL in radio but also, proportionately, in television. More specifically, it enables the Group to develop a common commercial positioning over its entire advertising offering. In order to strengthen the impact of this position, NRJ GLOBAL extended the study that began in 2009 on prospects and trends in consumption for the age group, with a section specifically devoted to trends for the consumption of goods and services relating to pleasure. Record new audience growth for NRJ in 2012 In 2012, during the period published by Médiamétrie and throughout the year, NRJ recorded the strongest annual growth, all stations included, per average fifteen minutes and in terms of audience share (3). In terms of the latter criteria, this is the tenth consecutive year of growth (4). 25 Sources: Médiamétrie, 126,000 Radio, Monday-Friday, 5 am to midnight, aged 13 and over 1. November-December 2012 and average in 2012 vs average in 2011, AA and DLL, Total Radio 2. November-December 2012, AA NRJ GROUP: 12,097,000 listeners a day

27 3. NRJ, year-on-year change in DLL and AS, January- March 2012, April-June 2012, September-October 2012, November-December NRJ, year-on-year growth in AS over 10 consecutive periods from September-October 2010 to November-December NRJ, , , , year-onyear change, AQH and AS 6. November-December 2012, NRJ, change versus September-October 2012 and versus November- December 2011, , AA, AS, AQH, DLL 7. November-December 2012, AA NRJ: 6,195,000 listeners a day 8. CHERIE FM, change November-December 2012 versus November-December 2011, AA, AS, AQH, DLL 9. CHERIE FM, change November-December 2012 versus November-December 2011, DLL +14m i.e. +18% 10. November-December 2012, AA CHERIE FM: 2,225,000 listeners a day 11. November-December 2012, CHERIE FM, audience structure in AQH 12. CHERIE FM, , change in AA, November- December 2012 versus November-December Average AA for NOSTALGIE in 2012: 3,062,000 listeners a day 14. November-December 2012, NOSTALGIE, AA, QHM and AS, age group 15. Average 2012, RIRE ET CHANSONS, audience structure in AQH 16. November-December 2012, RIRE ET CHANSONS, AA 17. November-December 2012, AA NRJ GLOBAL: 12,097,000 listeners a day 18. November-December 2012, NRJ GLOBAL, AS, age group AQH = Average Quarter Hour NRJ is also the leading radio brands on mobile handsets (3). In 2012, all of the iphone and ipad applications were revamped from a graphical and ergonomic perspective, the NRJ and NRJ 12 Android tablet applications were launched and social functionalities are now available on all of the mobile applications. Finally, NRJ is the leading radio on social networks: with 6.6 million fans in its universe and more than 1,865,000 fans on its official page, NRJ is the leading media brand on Facebook. The NRJ web radios can now also be accessed on social networks. On Twitter, NRJ is the leading radio account with more than 1,190,000 followers and is the second largest French media account. In 2012, NRJ also introduced NRJ Twitcam VIP on Twitter with major international artists, the aim being to continue bringing listeners and stars closer. Moreover, in January 2013, the NRJ Music Awards 2013 became the most Tweeted live programme in the history of French television with 1,447,287 tweets (4). Finally, the 14,000 subscribers of Instagram, mean that NRJ is also the leading radio on this social network. In television, NRJ 12 is now one of the national leaders in Social TV. On Twitter, regularly ranked the number 2 national channel and the number 1 DTT channel, NRJ 12 is also the second most live-tweeted each week (4) and its programmes systematically appear on the podium of social audiences. In addition to the radio and TV offering on the Internet and mobile Internet, via computers, tablets and other mobile terminals, the Group is also continuing the development of its applications for connected TVs, particularly with the use of interactive additional services such as "NRJ 12 replay" for catch-up TV and the brand's web radios. Strong development of services on new means of listening to media A pioneer in new technologies, the Group stood out again in 2012 in the digital sphere. In radio and more particularly in web radios, the Group is the leader with an offering of more than 200 web radios for all events and all generations. These web radios can be listened to anywhere and at any time on the websites of the Group's radios, via smartphone and tablet applications and on connected televisions. In January 2013, the Group's web radios had recorded 38.6 (1) million visits, up 123% in relation to January 2012, of which more than 32.6 million unique visits for the NRJ branded web radios. On the internet, nrj.fr is the leading music radio (2) and the Group continued to innovate in 2012: revamping the nrj.fr and NRJ 12.fr websites, introducing the cherie25.fr website, integrating the Facebook "watch" and "listen" functions on all of its websites, proposing social functions on NRJ 12 player, for which the image quality was upgraded. 26 NRJ is currently the radio/tv publisher that is best represented, both in the HBBTV European standard and on the various proprietary TV portals of all the major brands of televisions and connected products: The catch-up offering is also available via the set-top boxes of the various cable and ADSL operators. Sources: (1) At Internet Xiti, visits on the Group's radio players and web radios, on internet and mobile, January. (2) PANEL MEDIAMETRIE//NETRATINGS, December 2012, ad hoc ranking of radio station website domains. (3) OJD ranking of mobile applications, December (4) Mesagraph social TV observatory. Record audience figures for the Group's television channels A French television market that reached record levels in 2012 In 2012, according to the Médiamétrie "TV 2012" survey, TV listenership time increased a further 3 minutes a day and per person, to a record of 3 hours and 50 minutes a day per person. This is a result of the combined effect of direct programme consumption, the increase in the number of channels viewed and the contribution of recorded broadcasting, which has increased notably via the development of TV via ADSL and fibre among over one third of French viewers. In 2012, more than 16 million individuals viewed catch-up TV thanks notably

28 to the fact that more than 82% of French viewers use a flat screen and more than 78% a HD television. We also note that only the free DTTV channels have grown at the expense of the historical national channels and thematic channels. NRJ 12 In 2012, strictly in line with the broadcasting quotas set by the Conseil Supérieur de l Audiovisuel, NRJ 12 continued with the effectively managed development of its programming schedule, further strengthening its editorial strategy, based in particular on developing proper brands making up the channel's identity. In an environment that continued to favour the development of new DTTV channels in 2012, NRJ 12's audience share continued to increase satisfactorily, as shown by the annual audience ratings: with national audience share of 2.4% in 2012, NRJ 12 is the number 3 channel among the new entrant DTTV channels. Every day, more than 9.6 million viewers watch NRJ 12, up by 8% in 1 year. In 2012, NRJ 12 continued to apply a strategy of targeting listeners, with a focus on a younger listenership, and generated the strongest progressions in the following key categories: under 25's with +1.0 point of audience share, under 35's with +0.8 of a point of audience share, under 50's with +0.4 of a point of audience share, women under 50 responsible for purchasing with +0.5 of a point of audience share. In 2012, the channel was positioned: second among new DTTV entrants in the: age bracket with 5.5% of audience share, age bracket with 4.2% of audience share. and third among new DTTV entrants in the: age bracket with 3.3% of audience share, - women under 50 responsible for purchasing with 3.0% of audience share, age bracket with 2.8% of audience share. Source: Médiamétrie Médiamat, consolidated audience share, Médiamat 2012, audience share In 2012, NRJ 12 recorded 38 broadcast programmes with more than one million viewers, up 46% in one year. In the spring, ANGES DE LA TELEREALITE Season 4 generated record viewer ratings enabling NRJ 12 to be the only new DTTV channel to recurrently exceed one million viewers during prime time access. NRJ PARIS At the end of 2012, NRJ PARIS beat its own record with an average of 3,100 viewers at any given time, up by a record 48% in one year. Every week, more than one million viewers watch NRJ PARIS, i.e. more than 300,000 new viewers gained in one year. Other indicators also showed an increase: a growing reputation: more than one out of every two people in the Paris region know about NRJ PARIS, representing an increase of 235,000 individuals, a growing overall public: nearly 2.2 million individuals began to watch NRJ PARIS. Source: Médiamétrie Survey on local DTTV channels in Paris region, September-December 2012, base 15 years and older equipped with a TV in Paris region. NRJ HITS, the 100% hits channel NRJ HITS is the leading channel of the 14 music channels on cable, satellite and ADSL. In line with NRJ radio's music programming schedule, NRJ HITS offers a 100% music programming schedule with all the latest clips, news, hits and concerts from the greatest stars. So, thanks to the reputation of the NRJ brand and its know-how in musical programming, in 2012, the NRJ HITS channel beat its own records and strengthened its position as the number 1 musical channel, with 6.9 million viewers per month(1). Out of the 94 thematic channels via cable, satellite and ADSL, NRJ HITS is the 19th most watched channel: each day recording more than 700,000 viewers, giving it a lead of 45% on its most immediate rival (MCM), with 14,200 viewers per average fifteen minutes, representing a lead of 199% on its most immediate rival (TRACE URBAN), as the leading music channel among the 25 standard targets, i.e. aged 4+, women aged with responsibility for purchasing, aged 25-49, and (1) Médiamétrie Médiamat thematic, period 24 inter 2 (November-December 2012), Monday to Sunday 3.00pm/3.00am. CHERIE 25, the channel aimed at women On 27 March 2012, the company CHERIE HD was selected by the Conseil Supérieur de l Audiovisuel to launch the new national HD DTTV channel, CHERIE 25, the channel specifically aimed at women but which also has content for men. CHERIE 25 was successfully introduced on 12 December The programme schedule includes programmes with local, positive and informative content such as "Sans Tabou" and "99% plaisir", fictional programmes such as "Des Femmes et des Bombes", "Dos au mur", "Roxane", and films. At the end of 2012, CHERIE 25 was available on 60% of French territory, and it targets 95% by early CHERIE 25 showed a promising launch in terms of both viewers and advertisers, with a sound commercial base: a public comprising 63% women aged 15 and over, making it the free DTTV channel with the biggest female ratings, an average audience share of 0.2% with the female age bracket outperforming (0.5%), 27

29 along with: increasingly popular prime time slots, with a Thursday evening film slot that regularly exceeds 100,000 viewers, series such as "The Middle" on Saturday evening and "The Border" on Sunday evening, the audience ratings of which are increasing, day-time programmes which are also gradually showing increased ratings, with programmes such as "Top Chef" in the morning and "Real Housewives" in the middle of the day which has reached 40,000 viewers. International development of the NRJ/ENERGY and NOSTALGIE/NOSTALGIA brands In 2012, the Group continued to develop its brands NRJ/ENERGY and NOSTALGIE/NOSTALGIA internationally: Germany Audiences ENERGY brand In Germany, according to the latest MA 2013 Radio I survey period(1), the ENERGY brand (4) had a total of 284,000 listeners per average hour, representing a reduction of 9.8% compared with the previous period (MA 2012 Radio II (2)). Subsidiaries The majority controlled stations which are marketed by the Group (ENERGY CITY KOMBI (5) + ENERGY Région Stuttgart) have a total of 180,000 (1) listeners per average hour, of which 150,000 listeners per average hour in the age advertising target. While in year-on-year terms, the evolution of audience ratings has been disappointing in Stuttgart and Bavaria, after two consecutive years of particularly satisfactory levels, the ENERGY Berlin station shows very encouraging audience ratings. In fact, with 60,000 listeners per average hour, ENER- GY Berlin has shown an increase of 11.1% in relation to the previous period (MA 2012 Radio II (2 ) and of 13.2% in relation to last year (period MA 2012 Radio I (3) ). In the age advertising target, this increase reached 19.0% year-on-year with 50,000 listeners per average hour. Steered by the Head of Programmes at NRJ France, an action plan to boost ENERGY's audience ratings in Germany was implemented in the second half of Bear in mind that following successive acquisitions in 2010 and 2011, on 1 January 2012 the Group owned 67.29% of the capital of Frankfurt Business Radio GmbH & Co. Betriebs KG, which is licensed to broadcast in the Rhein-Main region, notably covering the cities of Frankfurt, Wiesbaden and Darmstadt. Given the lack of short to medium term profitability prospects of ENERGY RHEIN MAIN, the Group sold 49% of the station's capital at the beginning of March 2013 to a German operator, with regard to which it also holds an option to sell 18.29% of the remaining capital. Note that the transfer of risks and economic benefits was effective from 1 January Austria Audiences In Austria, the ENERGY stations are particularly well positioned on the years target. Indeed, ENERGY is: The number 1 private radio station in Innsbruck, with a daily aggregate audience of 8.2% (1). The number 2 private radio station in Vienna and Salzburg with an aggregate daily audience of respectively 10.4%(1) and 9.8% (1). (1) Source: Radiotest 2nd half of 2012, Monday/Sunday, target year bracket. Development in Styria At the end of 2010, NRJ GROUP acquired four radio companies, including: IQ-PLUS MEDIEN GmbH whose RADIO GRAZ format covers the city of Graz, the country's third largest city, Three sub-branches of IQ-PLUS MEDIEN GmbH which broadcasts RADIO EINS in other localities of Styria, including Bruck an der Mur. Due to a negative ruling by the Austrian regulatory authority in February 2013, the possibility of the Group broadcasting RADIO GRAZ under the ENERGY format in the short term is no longer on the cards. Licences The Group obtained approval from the Austrian regulatory authority for the renewal of its Salzburg licence for a period of 10 years from 1 October German-speaking Switzerland Audiences (1) Source: MA 2013 Radio I - base German population 10 years and over, Monday/Friday. (2) Source: MA 2012 Radio II - base German population 10 years and over, Monday/Friday. (3) Source: MA 2012 Radio I - base German population 10 years and over, Monday/Friday. (4) ENERGY CITY KOMBI + ENERGY Stuttgart region + ENERGY Saxony + ENERGY Bremen. (5) ENERGY Berlin + ENERGY Hamburg + ENERGY Munich + ENERGY Nuremberg + ENERGY Rhein-Main. ENERGY Rhein Main 28 Zurich: ENERGY ZURICH, of which NRJ GROUP owns 49% of the capital, saw its audience increase by 0.3% to 291,000 listeners per day(1). Thus, the station is consolidating its position as the undisputed leader in the year, year and year targets, and as the number 2 player on the overall target. Berne: with 115,000 listeners per day(1), compared with 99,000 one year previously, ENERGY BERN, a station under a brand licence

30 held by RINGIER AG, a partner of NRJ GROUP in German-speaking Switzerland, further confirmed its leadership in its market. Basel: only one year after its launch on 13 January 2012, ENERGY BALE has exceeded all expectations with 101,000 listeners a day, i.e % in relation to its predecessor RADIO BASEL. ENERGY BALE is already number 1 in the youth targets years and years but also in the year target (1). At the beginning of 2012, NRJ GROUP and its partner RINGIER AG indirectly took a minority stake respectively 5.2% and 9.8% in RADIO BASEL AG. (1)Source: KRT Q4/2012 weekly aggregate audience - target group 9+, progress in relation to period for 4/2011. Coverage On 31 December 2012, NRJ had 47 frequencies, corresponding to technical coverage of 4.9 million inhabitants, or a coverage rate of 93%. RADIO NOSTALGIA, which was initially present only in Helsinki, saw rapid growth in its coverage over the last two years and now covers 6 frequencies and 47% of the Finnish population. Belgium In German-speaking Switzerland, ENERGY for the first time reached a half a million listeners a day in the year target, with 507,000 listeners, up by an annual 11.0%. (1) (1)Source: Publicadata - RadioControl 2nd half of 2012 versus 2nd half of 2011, Monday-Friday, target 15 years and over, German-speaking Switzerland. French-speaking Switzerland As a reminder, in French-speaking Switzerland, the Group broadcasts the NRJ and NOSTALGIE programmes from France. Audiences With respectively 74,300 listeners each throughout the whole of French-speaking Switzerland (1), NRJ and NOSTALGIE have strengthened their positions in their broadcasting zones of Geneva and Lausanne: NRJ is thus the number 1 radio station for young targets: 15-24, and years (2), For its part, NOSTALGIE is the number 2 radio station on the 35 years and over age group(2). (1) Source: Publicadata - RadioControl 2nd half of 2012, Monday-Friday, target 15 years and over, French-speaking Switzerland. (2) Source: Publicadata - RadioControl 2nd half of 2012 Monday/Friday Geneva/Lausanne. Advertising department agreements At the beginning of 2012, the Group renewed its commercial advertising department agreements with ME- DIA ONE CONTACT SA. Finland Audiences Audiences NRJ Wallonia: during 2012, NRJ's audience share on the overall 12 years and + target rose by a strong 6.9% compared to 5.0% in NRJ gained 87,964 listeners a day in the space of one year. In the year bracket, its market share increased from 12.6% in 2011 to 16.0% in 2012, a record achievement in NRJ's core target (1). NOSTALGIE Wallonia: NOSTALGIE, which is 50% owned with the CORELIO Group, recorded market share of 10.9% compared with 11.4% in This decrease is solely due to a slight fall in the duration of listening time. In its core target of years, NOSTALGIE's market share remained almost stable in 2012 at 13.7% compared with 13.8% in 2011 (1). In 2012, in the commercial target of years, NRJ and NOSTALGIE were respectively ranked 3rd and 5th radio stations in Wallonia (1). NOSTALGIE Flanders: In Flanders, NOSTALGIE Nord - which is 50% owned by NOSTALGIE Wallonia along with the CONCENTRA Group saw continued growth in its market share to 6.7% in 2012 compared with 5.8% in (1) Source: CIM Radio 2012 (W ) VS CIM Radio 2011 (W ) - Target 12 years and + Monday- Sunday 0h 24h GIE NOS ENERGIES In 2012, the Group continued to benefit from the synergies established within the framework of GIE NOS'ENERGIES, which was founded in June 2010 in Brussels, shared equally between NRJ and NOSTAL- GIE, and which pooled the support and shared functions of both companies and their shareholders NRJ GROUP and the CORELIO Group. NRJ: in 2012, NRJ recorded a record high audience of 949,000 listeners per week (1), representing a year-on-year increase of 5.3%. Norway Audience RADIO NOSTALGIA: already with 267,000 listeners a week (1), RADIO NOSTALGIA has shown exponential growth (+181.1% year-on-year) only two years after its introduction in February In Norway, according to the latest Gallup survey for the fourth quarter of 2012, NRJ had 103,000 listeners a day. (1)Source: Gallup (PPM)- Q4/ Monday-Sunday - Target 12 years and +. 29

31 Advertising department agreement As a reminder, at the end of 2010, the Group renewed the commercial advertising agreement with the Swedish Modern Times Group (MTG). Sweden Audience In Sweden, NRJ consolidated its positioning in young and urban targets, each day recording 175,200 listeners in the three main cities of Sweden: Stockholm, Gothenburg and Malmö (1). (1) Source: TNS SIFO I/ Monday-Sunday - Target 9-79 years. New cooperation agreement In November 2012, RBS Broadcasting AB, the holder of licenses to transmit in Sweden and 100% controlled by NRJ GROUP, concluded a memorandum of understanding with SBS Radio AB covering long-term cooperation between the two groups from 1 January This agreement facilitated among other things an increase in the coverage of the NRJ format, which increased from 40% of the Swedish population and 3 agglomerations in 2012 to 70% of the Swedish population and 22 agglomerations in Licensing agreements In 2012, the Group continued to develop internationally with the signature of a new ENERGY brand licence agreement in Saint Petersburg with its Russian partner PROF MEDIA BROADCASTING CORPORATION (PMBC). Since the introduction of ENERGY in Russia in 2006, NRJ and PMBC have together established a number one position in the Moscow region by successfully developing a network of 40 frequencies, which is now federal in scope with the launch of ENERGY Saint- Petersburg on 3 September The economic model of brand licensing agreements is based on the collection of a brand royalty of 5% of revenue associated with a guaranteed minimum, with partners being selected according to their financial soundness and the quality of their position in the market. With more than 600 frequencies in 14 countries, obtaining more than 25 million listeners a week, NRJ/ENERGY is the leading music radio brand worldwide. Development of a digital sector In 2012, the NRJ/ENERGY brand continued to strengthen its leadership in the digital sector with: more than 16.5 million listening sessions for its web radios, more than 5 million fans on Facebook, and already 7 million applications downloaded outside France. Shows and other productions: start of "1789 Les Amants de la Bastille" and good performance of the music label The Shows and Other Productions division saw the success of the "1789 Les Amants de la Bastille" musical, which opened in October 2012 at the Palais de Sports in Paris. Given its commercial and economic success in Paris in 2012, the show which was coproduced with Dove ATTIA, Albert COHEN and TF1, began to tour around France at the start of 2013, with a return to Paris planned at the end of the year. The Shows and Other Productions division benefited from the good performance, again this year, of the NRJ MUSIC label on the compilations market in France. In 2012, the label published the 7 best-selling compilations in France, particularly the following compilations: NRJ Music Awards 2012 (320,000 copies sold), NRJ summer Hits only 2012 (160,000 copies sold) and NRJ Extravadance (120,000 copies sold). NRJ GROUP thus confirms its undisputed leadership in this market, totalling more than 2 million compilations sold in (source Gfk/BIPP (SNEP) Continued development of the Broadcasting business In 2012, the Group continued to develop its broadcasting activity, particularly in the DTTV market. On 12 December 2012, two new multiplexes, R7 and R8, began broadcasting for the first time. These two new DTTV clients will be rolled out in 12 phases, region by region, in accordance with the schedule approved by the Conseil Supérieur de l Audiovisuel, i.e. until 7 April Thus, in 2012, towercast SAS introduced 103 new DTTV services and now provides more than 1,700 broadcasting services on the primary and secondary networks, representing about 18% market share. In 2012, TowerCast SAS also won around 100 new FM services, essentially as a result of partial invitations to tender by the Conseil Supérieur de l Audiovisuel and a call for bids by clients. At the end of 2012, towercast SAS therefore provided more than 1,400 broadcasting services, representing about 25% of the market share. To accompany this development, towercast SAS continued to invest significantly in its infrastructures in 2012, albeit to a lesser extent than in 2011, the year in which the analogue signal was switched off. At the end of 2012, towercast SAS began a significant new phase of infrastructure development for the broadcasting market, notably for the 6 new HD channels which are to be rolled out over around two years. 30

32 2012 full-year earnings (in million euros) Change (%) Revenues % Of which dissimilar barters % Revenues excluding dissimilar barters % Current EBIT before dissimilar barters % Current EBIT / revenues (excluding dissimilar barters) 16.2% 16.2% Current EBIT % Non-recurring operating income and expenses % Financial income % Corporate income tax (24.7) (19.3) +28.0% Share in income of associates (0.4) (0.2) % Consolidated net income % Including minority interests % Including net attributable profit % The definition of the above key indicators is given in the notes attached to the consolidated financial statements in chapter Accounting Principles and Policies in sections to In 2012, NRJ GROUP recorded EUR million in consolidated revenues (excluding dissimilar barters), compared with EUR million in 2011, up 4.1% (4.1% at constant scope and exchange rates). Current EBIT excluding dissimilar barters came to EUR 63.5 million in 2012, compared with EUR 61.2 million in 2011, climbing 3.8%. After factoring in income from dissimilar barter operations, current EBIT totalled EUR 62.9 million in 2012, up 2.3% in relation to EUR 61.5 million recorded in Excluding losses linked to the launch of CHERIE 25, current EBIT excluding dissimilar barters reached EUR 67.8 million, up 10.8%. Non-current operating income and expenses were a negative EUR 1.1 million in 2012, compared with a positive EUR 1.0 million in In 2012, non-current operating income and expenses mainly included a provision for impairment of goodwill internationally. In 2011, non-current operating income and expenses mainly included a reversal of provision for risks not directly related to the activity. Financial income in 2012 came to EUR 1.1 million, compared to EUR 2.9 million in While cash income was stable despite the fall in average cash, the fall in financial income can be attributed to the fact there was no non-recurrent income in 2012 related to the sale in 2011 of shares in EURO INFORMATION TELECOM SAS (formerly NRJ MOBILE SAS). The tax charge stood at EUR 24.7 million in 2012, compared to EUR 19.3 million in It should be noted that deferred tax included in the tax charge represented income of EUR 1.1 million in 2012 against an income of EUR 6.5 million in The share in income of associates shows a net loss of EUR 0.4 million for 2012, compared with a EUR 0.2 million net loss in This reflects partly an improvement in income from the activity of NOSTAL- GIE in Flanders (Belgium) and partly a negative contribution from activities in German-speaking Switzerland. The share of consolidated net income attributable to minority interests in net earnings is EUR 0.7 million in 2012, compared to EUR 0.3 million in In 2012, it mainly corresponded to the share of net income allocated to NRJ GROUP's co-producers for the musical "1789 Les Amants de la Bastille". In total, net attributable profit came to EUR 37.1 million in 2012, compared with EUR 45.6 million in 2011, down 18.6%. 31

33 REVENUES AND CURRENT EBIT (excluding dissimilar barters) PER ACTIVITY Summary table (in million euros) Revenues Change Music Media & Events % Television % International Business % Shows and Other Productions % Broadcasting % Revenues excluding dissimilar barters % Current EBIT Change Music Media & Events % Television (5.3) (1.7) % International Business % Shows and Other Productions % Broadcasting % Other Business (0.4) (1.1) -63.6% Current EBIT excluding dissimilar barters % Operating income from dissimilar barters (0.6) % Current EBIT % Analysis for each business division Music Media & Events (In million euros) Revenues excluding dissimilar barters Current EBIT excluding dissimilar barters Change (%) % % Current operating margin 23.7% 24.9% In 2012, in a difficult advertising market, revenue from the Music Media and Events division stood at EUR million against EUR million in 2011, representing a decrease of 5.5%. This performance factors in a 5.7% decrease in revenue from the Radio business in France in Revenue on the internet activities increased while revenue from events declined. The division's expenses fell by EUR 6.6 million in 2012 in relation to 2011: the fall in revenue was accompanied by an automatic fall in copyright royalties, which are paid based on a percentage of revenue, expenses related to the radio stations fell after factoring in non-recurring items, while current expenses were kept under control and broadcasting costs increased essentially to the advantage of the Group's broadcasting subsidiary SAS, national and local advertising saleshouse expenses fell notably due to a fall in personnel expenses and a reduction in revenue repayments to external radios marketed by the Group, support function costs fell due to a lower allocation in the Music Media and Events division and a fall in personnel expenses despite an increase in depreciation and amortisation linked to investment in audiovisual and IT resources during the previous years, other expenses related to internet activity increased due to the development of the Group's internet and mobile internet activities, notably at a local level, finally, other expenses linked to the events activity fell due to a decline in activity in Overall, despite a fall in revenue of EUR 11.9 million, the fall in expenses of EUR 6.6 million helped to preserve current EBIT of roughly 24%. Current EBIT excluding dissimilar barters for the Music Media and Events division therefore stood at EUR 48.1 million in 2012, compared to EUR 53.4 million in 2011, down by 9.9%. 32

34 Television (In million euros) Revenues excluding dissimilar barters Current EBIT excluding dissimilar barters Change (%) % (5.3) (1.7) % Current operating margin -6.3% -2.2% In television, revenue stood at EUR 83.5 million in 2012, compared to EUR 77.7 million in 2011, representing an increase of 7.5% despite a difficult advertising market. This increase mainly stems from a steady increase in revenue from NRJ 12 and a slight contribution from CHERIE 25 which was successfully launched on 12 December Expenses on the television division increased by EUR 9.4 million. This can mainly be attributed to: an increase in variable expenses calculated as a percentage of revenue, notably including the COSIP tax as a result of the growth in revenues, the development of the programming schedule of NRJ 12, notably through the reinforcement of identity productions, an increase in technical and broadcasting costs, an increase in advertising saleshouse costs related to the television division, the impact of costs linked to the launch of CHERIE 25, an increase in support function costs allocated to the division, notably rent, management fees and amortisation of investment in television resources, related to the development of the television division. Due to slower growth in revenue in a difficult market environment and higher operating expenses, there was a negative current EBIT excluding dissimilar barters in the television division of EUR 5.3 million in 2012 compared with negative current Ebit of EUR 1.7 million in When we strip out the losses linked to the introduction of CHERIE 25, the loss of the television division comes out at EUR 1.0 million compared with EUR 1.7 million in The national channels division, NRJ 12 + NRJ HITS, generated current Ebit excluding dissimilar barters of EUR 0.3 million in 2012 versus breakeven in 2011 and NRJ PARIS generated negative current Ebit of EUR 1.3 million in 2012 compared with a loss of EUR 1.7 million in International Business (In million euros) Revenues excluding dissimilar barters Current EBIT excluding dissimilar barters Change (%) % % The revenues of the International Activities came out at EUR 42.7 million in 2012 compared with EUR 40.0 million in 2011, up 6.8% (+6.8% at constant scope and exchange rates) attributable to an increase in revenues in Germany, Belgium and Finland. Due to a slight fall in the division's overall operating expenses of EUR 0.6 million and the increase in revenues, current Ebit excluding dissimilar barters came out at EUR 4.0 million in 2012 compared with EUR 0.7 million in 2011, up by more than 471%. German-speaking region Current Ebit excluding dissimilar barters in the Germanspeaking region showed a sharp improvement. Although it came out at a negative EUR 0.6 million in 2012, this is a significant improvement compared with the EUR 3.2 million loss recorded in Activity in Germany began to show profits again after eight years of operating loss, and despite the inclusion of the losses of ENERGY RHEIN-MAIN in Frankfurt. This reflects the positive impact of the sharp increase in revenue (+10.3%) amid falling expenses. In Austria, there was a stabilised loss of EUR 1.1 million in 2012 compared with a loss of EUR 1.2 million, despite a fall in revenue (-4.2%). French-speaking region The current EBIT excluding barters for the Frenchspeaking zone stood at EUR 2.8 million in 2012 against EUR 2.4 million in 2011, bearing in mind that the currency effect on current EBIT excluding dissimilar barters in Switzerland is slightly positive. This positive trend integrates an increase in current Ebit excluding dissimilar barters in both Belgium and Frenchspeaking Switzerland: In Belgium, the increase in current Ebit excluding dissimilar barters reflects a sharp increase in revenues (+9.9%) amid a closely-managed increase in expenses. In French-speaking Switzerland, revenues fell by nearly 41% due to a change in the accounting presentation of revenue following a change in the external advertising contract signed by the Group for this country. The Group now books income on net sales while previously it booked product revenues along with a charge for marketing commissions. Current EBIT excluding dissimilar barters for French-speaking Switzerland increased by EUR 0.1 million to EUR 0.6 million in Current operating margin 9.4% 1.8% 33

35 Nordic region The current EBIT excluding barters for the Nordic region stood at EUR 0.2 million in 2012 against EUR 0.2 million in 2011, with a negligible currency effect on current EBIT excluding dissimilar barters. This stability includes varying performances depending on the country. Current Ebit excluding dissimilar barters generated as part of the partnership with MTG showed a decline in Sweden to EUR 0.4 million in 2012 and came out stable in Norway at EUR 0.1 million. In Finland, current Ebit excluding dissimilar barters posted a loss of EUR 0.3 million compared with a loss of EUR 0.6 million in 2011, the operating loss having been halved thanks to revenue growth. Multi-countries Current EBIT excluding dissimilar barters for the other international activities, coming firstly from income from license contracts and secondly from the application of central costs for the international activities department, stood at EUR 1.6 million in 2012, against EUR 1.3 million in Shows and Other Productions (In million euros) Revenues excluding dissimilar barters Current EBIT excluding dissimilar barters Change (%) % % Current operating margin 28.9% 54.8% The Shows and Other Productions division posted EUR 15.2 million in revenues in 2012 compared with EUR 3.1 million in 2011, up by a sharp 390.3%. This increase is mainly attributable to the success of the musical "1789 Les Amants de la Bastille" which began running in October 2012 and the contribution of which to consolidated revenue stands at EUR11.4 million. Excluding musicals, the division's revenue increased by 22.6%, essentially reflecting growth in the activity of the NRJ MUSIC label. The division's expenses also showed a sharp increase of EUR 9.4 million due to the start-up of the musical, and current Ebit excluding dissimilar barters reached EUR 4.4 million in 2012 compared with EUR 1.7 million in This sharp increase reflects not only the success of the musical but also an increase in the current Ebit excluding dissimilar barters of the music label, which continues to grow. Broadcasting (In million euros) Revenues excluding dissimilar barters Change (%) % EBITDA* % Current EBIT excluding dissimilar barters % Current operating margin 26.0% 19.5% * Current EBIT excluding dissimilar barters before depreciation and provisions The Group's Broadcasting division continued to generate strong revenue growth on the back of its development on the DTTV and FM markets. Its contribution to consolidated revenue amounted to EUR 48.9 million in 2012, compared with EUR 42.1 million in 2011, up 16.2%. Operating expenses increased by 2.3 million due to activity growth. This increase can primarily be attributed to: an increase in external expenses linked to broadcasting costs, essentially comprising rents and electricity costs, an increase in depreciation related to high level of investment in 2011, the year in which the analogue television signal was switched off, an increase in the Group's organic revenue billed for broadcasting services to the Group's radio and television channels, a reduction in personnel expenses. In total, EBITDA represented EUR 25.4 million in 2012, compared with EUR 18.6 million in 2011, while current EBIT excluding dissimilar barters came in at EUR 12.7 million in 2012, versus EUR 8.2 million in Other Business (In million euros) Revenues excluding dissimilar barters Current EBIT excluding dissimilar barters Change (%) - - N/A Current operating margin N/A N/A (na: not applicable) (0.4) (1.1) -63.6% Current EBIT excluding dissimilar barters for the Other Activities division, which includes expenditure and income related to managing and re-invoicing support functions (audiovisual, IT, property, general services and management functions) was a loss of EUR 0.4 million in 2012, compared with a loss of EUR 1.1 million in

36 2.4.4 INVESTMENTS AND FINANCING Current net cash (in million euros) Gross free cash flow before net debt servicing costs, other financial income and expenses, and taxes Taxes paid (30.4) (23.9) Change in working capital requirement (13.8) (0.1) Net cash flows generated by the business Disbursements relating to acquisitions of fixed assets (31.9) (33.9) Receipts related to the disposal of fixed assets Net cash flow assigned to investments (30.7) (31.3) Dividends paid by the parent company (23.8) (24.3) Receipts linked to new borrowing net of repayments 0.2 (0.3) Net acquisitions (disposals) of treasury stock 0.5 (16.4) Other flows relating to financing activities Net cash flows assigned to funding transactions (21.4) (39.2) Impact of the variation in exchange rates Change in current cash flow (10.2) (15.1) Net cash flows generated by the activity stood at EUR 41.7 million in 2012, compared with EUR 55.4 million in 2011, down EUR 13.7 million, given: gross free cash flow before net debt servicing costs, other financial income and expenses, and taxes came to EUR 85.9 million in 2012, up EUR 6.5 million in relation to a tax payment of EUR 30.4 million in 2012 compared with EUR 23.9 million in 2011, up by EUR 6.5 million mainly attributable to the comparison base in France and payments in 2012 related to the exceptional contribution of 5% an increase in the working capital requirement of EUR 13.8 million in 2012 compared with a quasi stable amount in 2011 (see consolidated balance sheet below. Net cash flows assigned to self-financed investment came to EUR 30.7 million in 2012, compared with EUR 31.3 million in Disbursements relating to fixed asset acquisitions came to EUR 31.9 million, compared with EUR 33.9 million in Acquisitions of tangible and intangible assets for EUR 27.2 million in 2012 compared with EUR 33.1 million in 2011, mainly concern: EUR 10.9 million related to the broadcasting activities in a year of transition and lower investment after the switch-off of the analogue signal in 2011 and before the six new HD channels began to broadcast at the very end of As a reminder, investment amounted to EUR 22.8 million in 2011, investment in audiovisual and IT equipment to the tune of EUR 7.9 million notably related to the development of the television division and the launch of the new channel, CHERIE 25, for which the Group invested in state-of-the-art audiovisual equipment in order to create a genuine television arm comprising three national channels and one local channel, investment in pre-production of the musical "1789 Les Amants de la Bastille" amounting to EUR 4.1 million, Internationally, investment amounted to EUR 1.0 million in 2012 compared with EUR1.4 million in Receipts related to the sale of fixed assets totalling EUR 1.2 million in 2012 compared with EUR2.6 million in They mainly related to the sale of financial assets. Net cash flows assigned to financing transactions correspond to a net disbursement of EUR 21.4 million in 2012, compared to EUR 39.2 million in In 2012, this essentially included the payment of a dividend for 2011 of EUR 23.8 million on the one hand, and financial income related to cash investments on the other. In total, after including the various cash flows presented above, net current available cash at the end of December 2012 stood at EUR 84.8 million, down EUR10.3 million in relation to EUR 95.1 million at the end of December

37 Consolidated balance sheet (in million euros) Goodwill Property, plant and equipment and intangible assets Investments in associates Non-current financial assets Non-current assets (excluding deferred tax and net of debts on fixed assets) Inventories Trade and other receivables Trade and other payables (145.3) (145.7) Working capital requirement (net of debt on fixed assets) Current tax liabilities (net of assets) 1.5 (5.3) Deferred tax liabilities (net of assets) (26.8) (28.4) Provisions (16.0) (16.6) Taxes and provisions (41.3) (50.3) Non-current borrowings (1.9) (0.7) Current borrowings 0.0 (0.1) Cash and cash equivalents Net cash surplus Shareholders equity Total assets Total liabilities (697.1) (686.4) Non-current assets net of debt on fixed assets are up EUR 5.1 million to EUR million. This change reflects the EUR 2.8 million increase in tangible and intangible fixed assets after factoring in acquisitions, disposals and depreciation for the financial year. The working capital requirement stands at EUR 80.7 million in 2012, up by EUR 13.8 million in relation to 2011 given: a slight increase of EUR 0.8 million in inventories, which almost entirely correspond to the programmes of the television division which amounted to EUR 60.3 million on 31 December 2012, an increase of EUR 12.6 million in trade and other receivables reflecting on the one hand a fall in receivables of EUR 7.7 million linked to lower media sales in 2012, an improvement in the collection of receivables at the end of the year, and lower receivables linked to dissimilar barters, and on the other hand an increase in deposits and payments on account of EUR 17.8 million, mainly related to programmes for the television division, a slight fall of EUR 0.4 million in trade and other payables. The current tax balance is a net receivable of EUR 1.5 million on 31 December 2012 compared with a net debt of EUR 5.3 million on 31 December The deferred tax balance is a net debt of EUR 26.8 million on 31 December 2012 compared with a net debt of EUR 28.4 million on 31 December Provisions fell by EUR 0.6 million to EUR 16.0 million on 31 December 2012 notably after taking into account allowances for the period amounting to EUR 5.9 million and reversals amounting to EUR 7.6 million. The net cash surplus of EUR 82.9 million was down by EUR 11.4 million, given the drop in current net cash of EUR 10.3 million and a slight drop in short and mediumterm borrowing. Consolidated shareholders' equity stood at EUR million on 31 December 2012, up by EUR 16.5 million compared to 31 December This increase is mainly due to the positive impact of earning for the period, which was partly offset by the dividend payment. 36

38 2.4.5 RECENT DEVELOPMENTS AND OUTLOOK Although the environment remains uncertain in 2013, the Group is confident in its capacity to continue developing its activities and notably: in radio, it will continue to increase the audience levels of all of its stations, in television, it will continue to develop identityaffirming productions in synergy with its two free national television channels, internationally, it will continue the work underway to increase the division's operating margin, Call Out: since September 2011, these daily telephone surveys have been conducted from an internalised call centre. Taking advantage of the latest available technologies in order to improve the quality of the results, they provide all of the Group's station managers with real-time information on the musical expectations of listeners. The tracks broadcast via playlists and related changes are analysed to adjust musical rotation based on degree of maturity. Strategic surveys: these national telephone surveys are used to prepare a map of the different editorial content and of the positioning of the Group's brands in their market universe. They are used to identify potential existing or future content, the related qualifications and the most appropriate communication strategy. in broadcasting, it will continue to expand notably on the DTTV broadcasting market, with the roll-out of six new HD channels launched in December 2012 until mid This roll-out will be accompanied by a pick-up in investment. Auditoriums: these musical surveys carried out in several towns in France test the back catalogue of each station over several hundred tracks, in order to renew the tracks that are played and optimise broadcasting. Trends Advertising receipts from the media activities in France (radio, internet and television) in the period January- February 2013 show growth in relation to the same period in OTHER INFORMATION RESEARCH AND DEVELOPMENT The Group has no research and development activity than could give entitlement to a tax credit. However, because of the nature of its business, NRJ GROUP is very attentive to technological and behavioural developments and uses part of its human, technical and financial resources in the following areas: Research in programming matters A significant share of the activities of NRJ GROUP depends on the operational analysis of radio and TV programme audiences and thus on their success amongst listeners and viewers. In this context, NRJ GROUP attaches particular importance to the development of its research departments. In radio In 2012, the Musical Research and Surveys Department continued to develop directly owned tools to monitor audience expectations as closely as possible and respond as best as possible to the stations' needs by improving the quality of the surveys, which are split into four distinct types: Focus groups: these qualitative group meetings provide in-depth analysis of the reasons for supporting or rejecting a programme, a brand or a presenter, providing conclusions and operational recommendations. In television Audiences are analysed daily by the Musical Research and Surveys Department in close collaboration with the channels to optimise the broadcasting of each programme. Concerning exclusive and proprietary content, specific tools such as focus groups are occasionally constituted to prepare operational recommendations on factors covering the attractiveness of programmes and drivers for increasing the loyalty of viewers. Market research The marketing departments belonging to the advertising agencies and radio stations carry out or make use of numerous market and audience surveys to anticipate developments in behaviour, markets and consumption relative to the various activities of NRJ GROUP. Technological research With its know-how and historical ability to integrate new technologies and new modes of broadcasting into its activities, NRJ GROUP carries out an ongoing technology watch. This covers both new broadcasting modes (modulation, video & audio coding, web radio, mobile telephony, IPTv, etc.), and associated services, in cooperation with the various marketing departments: interactivity, downloading, catch-up TV, streaming, etc. 37

39 2.5.2 IMPORTANT SUBSIDIARIES As stated above in the simplified organisation chart, NRJ GROUP is present in the following business lines: radio in France and internationally: the most significant subsidiaries are those which hold transmission licences in France, particularly NRJ SAS (programme NRJ), Radio NOSTALGIE SAS (programme NOSTALGIE), CHERIE FM SAS (programme CHERIE FM) and RIRE & CHANSONS SAS (programme RIRE & CHANSONS), In addition, NRJ PRODUCTION SAS and NRJ AUDIO SAS are the companies which respectively hold: the Group's property activities in Paris: full ownership of the buildings located at rue Boileau and avenue Théophile Gautier (cf ), the IT and audio activities: ownership of hardware and corresponding software PROPERTY ASSETS television, mainly with NRJ 12 SARL, which owns a licence to transmit a national TV programme broadcast by digital radio-relay (NRJ 12) and publisher, on cable and satellite, of the music channel NRJ HITS; CHERIE HD SAS, which owns the licence to transmit a national TV programme broadcast by digital radiorelay and via high definition (CHERIE 25); as well as SOCIETE DE TELEVISION LOCALE SAS (NRJ PARIS programme), which owns a licence to transmit a local television service in the Paris region, advertising agencies in France and internationally, the main ones in France being NRJ GLOBAL SAS for marketing national advertising space and REGIE NETWORKS SAS for marketing local advertising space, broadcasting: the main subsidiary concerns French activities with towercast SAS, internet and non-media: events and activities for the production or co-production of live shows. The Group's most significant property assets are the buildings located at 22 rue Boileau and at 46/50 Avenue Théophile Gautier in Paris in the 16th arrondissement. Other than the registered head office, these sites house the national studios of the radio stations NRJ, NOSTAL- GIE, CHERIE FM and RIRE & CHANSONS, the studio and final advertising department for the television division, and various necessary items of technical audiovisual equipment. These two sites also host most of the Group's IT equipment and installations. In the regions, NRJ GROUP operates radio studios and radio and TV broadcasting sites, which it generally rents. Internationally, NRJ GROUP generally rents the buildings housing its radio studios in each town where it is present. On the other hand, it owns the equipment necessary for their operation. NRJ GROUP regularly carries out technical checks and quality controls on its installations and has begun a process of modernisation and digitisation, both for the radio business and that of broadcasting. 38

40 2.6 NRJ GROUP PARENT COMPANY SITUATION AND ACTIVITY OF NRJ GROUP DURING THE PAST FINANCIAL YEAR AND QUANTIFIED RESULTS FOR THE YEAR Significant events of 2012 / Results of 2012 / Objective and comprehensive analysis of the development of business, results and the company's financial situation NRJ GROUP is the Group's parent company. Its income comes essentially from invoicing for services management fees performed on behalf of the Group's French companies, brand licensing royalties and dividends received from its direct subsidiaries. In this context, the company results of NRJ GROUP, and their development from one year to another, only partially express the Group's performance and do not show the same trends as the consolidated accounts. The unconsolidated financial statements of NRJ GROUP for the financial year ending on 31 December 2012 have the following main characteristics: 2012 full-year earnings (in million euros) Change Sales of services (1.6) Revenues (1.6) Operating expenses net of other operating income (22.2) (23.9) 1.7 Operating income (1.4) (1.5) 0.1 Financial income (41.6) 0.8 (42.4) Earnings before tax (43.0) (0.7) (42.3) Exceptional income (0.1) 1.6 (1.7) Employee profit sharing (0.6) (0.5) (0.1) Corporate income tax Net income (loss) (33.2) 9.9 (43.1) Revenues Revenue stood at EUR 20.8 million on 31 December 2012, compared to EUR 22.4 million on 31 December 2011, down by EUR 1.6 million. This decline can be attributed to a reduction of: management fees in the amount of EUR 1.0 million, mainly attributable to lower personnel expenses being included in the calculation base in 2012 in relation to 2011 (cf. remarks below related to operating expenses), re-billing of charges personnel expenses, fees, media buying - to the Group's French subsidiaries in the amount of EUR 0.6 million. 39

41 Operating expenses Operating expenditure, net of other operating income, stood at EUR 22.2 million on 31 December 2012, against EUR 23.9 million on 31 December From one year to the next, the main items changed as follows: Other purchases and external charges, which were almost stable, stood at EUR 9.7 million on 31 December 2012, compared to EUR 9.6 million on 31 December 2011, Personnel costs in 2012 stood at EUR 11.7 million (including EUR 3.5 million related to social-security charges and EUR9.5 million related to temporary work expenses) compared to EUR 15.4 million in 2011 (including EUR 4.2 million for social-security charges and EUR28.9 million related to temporary work expenses), down EUR 3.7 million. This decline can mainly be attributed to lower variable incentive and loyalty bonuses awarded to employees in 2012 in relation to On 31 December 2012, the company's average workforce stood at 121 persons, compared to 118 on 31 December Operating result Bearing in mind these variations, the operating result of NRJ GROUP remained almost stable at a loss of EUR 1.4 million on 31 December 2012, compared to a loss of EUR 1.5 million in Financial income On 31 December 2012, NRJ GROUP had a financial loss of EUR 41.6 million compared with a profit of EUR 0.8 million on 31 December 2011, representing a negative variation of EUR 42.4 million. This change is explained as follows: (In million euros) Variation in financial result At 31 December 2012 At 31 December 2011 Variation in debt waivers (i) (38.0) (38.1) (0.1) Variation in financial result on treasury shares (3.5) (5.7) (2.2) Variation in impairment of investments in subsidiaries (ii) (3.0) (2.1) 0.9 Variation in interest on receivables from subsidiaries (1.9) Variation in financial income on marketable securities and forward investments (0.1) Variation in dividends received (0.) Variation in impairment of receivables from subsidiaries (iii) (2.3) Total (42.4) (41.6) 0.8 (i) On 26 November 2012, NRJ GROUP granted a debt waiver to its two subsidiaries NRJ 12 SARL and BOILEAU TV SAS for a total of EUR 38.1 million in return for which it was granted a claw back on return to better fortune on the entire amount of the debt waived, expiring at the end of the annual general meetings convened by the two subsidiaries to approve their financial statements for the financial year 2022, (ii) The impairment over the year related to investments in subsidiaries related to BOILEAU TV SAS in the amount of EUR 1.8 million and ENERGY BRANDING SA in the amount of EUR 0.3 million. (iii) The impairment over the year related to receivables from subsidiaries mainly concerns SOCIETE DE TELEVISION LOCALE SAS in the amount of EUR 1.6 million. The reversal of impairment related to receivables from subsidiaries in the amount of EUR 3.6 million concerns BOILEAU TV SAS Earnings before tax On 31 December 2012, earnings before tax were a loss of EUR 43.0 million, compared to a loss of EUR 0.7 million on 31 December

42 Exceptional income On 31 December 2012, NRJ GROUP made an exceptional loss of EUR 0.1 million compared with a profit of EUR 1.6 million on 31 December 2011, representing a negative variation of EUR 1.7 million. This change is explained as follows: (in million euros) At 31 December 2012 At 31 December 2011 Variation in exceptional income Net capital gain from disposal of equity interest EURO INFORMATION TELECOM SAS (formerly NRJ MOBILE SAS) 1.6 (1.6) Other equity interests (0.1) 0.1 Tax penalties and fines (0.2) 0.2 Reversal of unused provisions 1.1 (1.1) Compensation payments related to employees (0.1) (0.8) 0.7 Total (0.1) 1.6 (1.7) Net income (loss) The net loss for the 2012 financial year, after taking into account employee profit-sharing for EUR 0.6 million and a tax benefit on the results at EUR 10.5 million, stood at EUR 33.2 million, compared with a net income of EUR 9.9 million for the 2011 financial year balance sheet (in million euros) Change Property, plant and equipment and intangible assets Investments in subsidiaries Receivables from subsidiaries (87.8) Treasury shares 14.5 (14.5) Other financial assets FIXED ASSETS (63.8) Trade and other receivables (6.4) Trade and other payables (34.7) (39.5) 4.8 Working capital requirement (23.4) (21.8) (1.6) Bank overdrafts (0.1) (0.1) Cash and investment securities (excluding treasury shares) (9.0) Net recurring free cash flow (8.9) Treasury shares (2.0) Provisions (2.7) (2.7) Borrowings (8.4) 8.4 Debts on fixed assets (0.6) 0.6 Shareholders equity (67.3) Total assets ,019.6 (81.3) Total liabilities (938.3) (1,019.6)

43 Investments in subsidiaries The variation in financial year 2012 of the net value of investments in subsidiaries is as follows: Company Share capital increase by capitalising debt Change in impairment Change over full-year 2012 NRJ 12 SARL BOILEAU TV SAS 2.1 (1.8) 0.3 ENERGY BRANDING SA (0.3) (0.3) Total 38.1 (2.1) 36.0 Receivables from subsidiaries The change in the net value of receivables from subsidiaries in 2012 breaks down as follows: (In million euros) Share capital increase by capitalising debt Increases/allowances Disposals/reversa ls Reclassifications Change over full-year 2012 Of which NRJ 12 SARL Of which BOILEAU TV SAS (38.1) (38.1) (36.0) (2.1) Receivables written off (38.1) (38.1) (36.0) (2.1) Increases Reductions (53.4) Impairment charges (1.7) (3.6) Total 38.2 (49.8) (76.2) (87.8) (40.7) 4.7 (53.4) (i) Of which EUR 27.7 million related to NRJ SAS. Net recurring free cash flow Net available cash excluding treasury shares is positive, going from EUR 48.2 million on 31 December 2011 to EUR 39.3 million on 31 December 2012, down by EUR 8.9 million. This variation can be explained as follows: (In million euros) Cash flow from operations of EUR 10.9 million (excluding impairment allowances of EUR 2.1 million related to treasury shares awarded to employees and booked under marketable securities) Change in net available cash flow 10.9 A reduction in working capital requirement of EUR 1.6 million 1.6 Cash flow allocated to positive investments of EUR 10.8 million of which EUR 13.5 million in net repayments obtained over the year related to receivables from subsidiaries The payment in May 2012 of an amount deducted from "Share premiums" of EUR 23.8 million (cf. remarks below related to shareholders' equity) 10.8 (23.8) The repayment of Group financing in 2012 of EUR 8.4 million. (8.4) Total (8.9) 42

44 Treasury shares The change in the net value of treasury stock in 2012 breaks down as follows: Net value (in million euros) On 1 January 2012 Shares purchased Shares sold Cancellation Depreciation At 31 December 2012 Treasury shares booked as fixed investments In relation to liquidity agreement (2.4) In relation to share buyback plans (ii) 14.0 (10.3) (3.7) Treasury shares booked as marketable securities Treasury shares assigned to employees (ii) 10.4 (2.0) 8.4 Total (2.4) (10.3) (5.7) 8.4 (i) The NRJ GROUP liquidity contract showed a net balance of 25 treasury shares on 31 December 2012 given: opening stock of 70,011 shares acquired during 2011, share purchases and sales conducted during the year of 331,015 shares and 401,001 shares respectively. (ii) The 2,004,495 treasury shares held on 31 December 2011 were cancelled in August 2012 (cf. remarks on shareholders' equity below). (iii) In 2012, the number of treasury shares awarded to employees remained unchanged at 1,500,000. At 31 December 2012, NRJ GROUP held 1,500,025 treasury shares, representing 1.85% of its capital. Shareholders equity On 31 December 2012, the company's shareholders' equity stood at EUR million against EUR million on 31 December 2011, representing a reduction of 67.3 million: (In million euros) Reduction in shareholders' equity After premiums Of which change After retained earnings Loss in 2012 (33.2) Pay-out in 2012 drawn from the issue premium account (23.8) (24.9) 1.1 Reduction in capital (10.3) (10.3) (i) (ii) Total (67.3) (35.2) 1.1 (i) (ii) (2) The Combined General Meeting of NRJ Group shareholders, held on 10 May 2012, agreed to pay out a total dividend of EUR 24.9 million or EUR 0.30 per share, drawn from the issue premium account. Since treasury shares are not eligible for a dividend, an amount of EUR 1.1 million corresponding to the deduction from the issue premium account of 0.30 times the number of treasury shares on the dividend payment date, i.e. 1,084,349 shares, was allocated to the retained earnings account. The Board of Directors which met on 29 August 2012 decided: to take the 2,004,495 treasury shares initially allocated to cover share purchase options and instead to cancel them, in accordance with the authorisation granted to it under the share buyback plan approved by the Combined General Meeting of 10 May 2012, to reduce the share capital by cancelling 2,004,495 treasury shares which were earmarked for cancellation, in accordance with the powers delegated to it by the AGM of 10 May 2012, with the negative difference of EUR 10.3 million between the nominal value of the cancelled shares and their nominal value being booked under the issue premium account. Balance sheet total On 31 December 2012, the Company's balance sheet total stood at EUR million against EUR 1,019.6 million on 31 December 2011, down EUR 81.3 million. 43

45 2.6.2 RECENT DEVELOPMENTS AND OUTLOOK No significant events likely to affect current-year profit have occurred since the financial year-end. The activity of NRJ GROUP during 2013 should remain very close to what it was during the financial year ended 31 December RESEARCH AND DEVELOPMENT During the elapsed year, NRJ GROUP booked no charges for research and development that might give entitlement to tax credit LUXURY EXPENDITURE In accordance with the clauses of Article 223, sub-paragraph four of the General Tax Code, we confirm that the accounts for the elapsed financial year take into account a sum of EUR 1,741 corresponding to expenditure non-deductible from taxable income DEVELOPMENT OF INVESTMENTS In accordance with the provisions of Article L paragraph 1 of the French Commercial Code, we hereby inform you that the Company directly sold or acquired no shares or obtained control of no companies over the past year INFORMATION ON TERMS OF PAYMENT Pursuant to articles L and D of the French commercial code, the following table presents the breakdown of the balance of trade payables at year-end by due date, excluding trade debtors, suppliers of fixed assets, barter trade payables and accrued trade payables (in thousands of euros): 2012 Debt due Debt not due Total Debt not due 0 to 45 days 46 to 60 days Trade payables 290 1,605 1, ,354 1,605 Barters trade payables 265 Accrued trade payables 1,626 Total trade payables and other accounts payable 3,786 > 60 days Total 2011 Debt due Debt not due Total Debt not due 0 to 45 days 46 to 60 days Trade payables 375 1,777 2, ,764 1,777 Suppliers of fixed assets 600 Barters trade payables 990 Accrued trade payables 2,263 Total trade payables and other accounts payable (including debts on fixed assets) 6,005 > 60 days Total 44

46 3 RISK FACTORS AND INSURANCE The Group carried out a review of the risks that could have a significant impact on its activity, its financial situation or its earnings (or its ability to meet its objectives) and considers that there are no significant risks other than those presented in this section. 3.1 RISKS RELATED TO THE COMPANY'S BUSINESS To secure its growth and anticipate new modes of media consumption, the Group has been developing new media for several years. It has therefore become a multimedia player in radio, television and the Internet, providing solutions for the different ways of consuming audiovisual content and media in an environment of technological revolution and growth in the internet and mobile internet RISKS RELATED TO THE ECO- NOMIC ENVIRONMENT AND COMPETI- TIVE POSITION As specified in part 2.4 Activity and results, the Group's core business consists of creating and developing media. Thus, 84% of consolidated revenues in 2012 came from selling advertising space or screens to advertisers. The Group's revenue therefore essentially depends on tends in advertising in the media. Consequently, the Group's activity depends indirectly on the economic health of advertisers and their prospects for growth and profitability, particularly in the French market. As the Group is essentially present in radio and television, its activity also depends on the choices that advertisers make between the different media - press, television, billboards, radio and internet - but also between the different players within each media category. In an economic crisis context, communication spending can be seen as a variable for adjusting costs among advertisers looking to limit the negative fallout from the crisis on their earnings, by restricting their budgets. More generally, any external constraint posing a threat to the advertisers' level of profitability represents a risk for the advertising market and consequently for NRJ Group. In 2012, the net advertising revenue market amounted to EUR 13.3 billion in France, down 3.5% based on the new scope of the IREP survey (Source IREP France Pub 2012). After a drop in media investments in 2008 and 2009, the advertising market grew by about 2.9% in 2010 and 0.1% in 2011 based on the former scope of the IREP survey (Source IREP France Pub 2011). Within the general trend of the media market, each medium may outperform or underperform the trend from year to year, according to the choices made by advertisers. Generally, visibility in the advertising market is low and depends on the economic health and dynamism of advertisers and therefore on the international and national economic background as stated above. The Group's competitive position in each of the media markets in which it is present also depends on the audience, or audience share, that it develops. It may therefore outperform or underperform the advertising expenditure trends observed for a medium, depending on whether its audience share increases or decreases. In radio media in France, the Group has a "balanced" portfolio of music radio stations built around 4 strong brands, and occupies a leading place, which gives it a commercial advantage, allowing it to show a market share greater than its commercial audience share (see part 2.4 Activities and results). With regard to DTR, in April 2012, because of the change in environment between 2009 and 2012 notably due to the disappearance of certain radio stations selected by the Conseil Supérieur de l Audiovisuel on 26 May 2009 and changes in the available resources, the Conseil Supérieur de l Audiovisuel changed the invitation to tender for free DTR (band III). Large private radio groups who are members of the Bureau de la Radio did not tender for this project because of the economic and technical uncertainties associated with it in its current state. For the same reasons, Radio France decided not to pre-empt the available frequencies. For the radios that tendered for the project, the Conseil Supérieur de l Audiovisuel issued broadcasting licenses at the start of 2013 for the Marseilles, Nice and Paris regions. NRJ lodged a claim for equitable relief with the Conseil Supérieur de l Audiovisuel. If the Conseil Supérieur de l Audiovisuel approves the multiplex operator proposal made by the radios that obtained frequencies, DTR could begin in these zones in autumn As regards paid DTR, at the start of 2013 the Conseil Supérieur de l Audiovisuel approved draft agreements on the selected services to be broadcast via Onde Numérique's bouquet, the services to be broadcast via L-band. NRJ is in talks with this operator for the supply of four programmes. This paid radio offering will not include advertising. The programme suppliers will be paid by Onde Numérique. Against this backdrop, the Group continues to develop its radio and webradio offering on internet and mobile internet in France (see part Activity and results). In fact, it is developing a radio and web radio offering that complements its terrestrial offering and which will be available via the internet and mobile internet via smartphone and tablet applications. Through this activity, which is in development phase, it can anticipate future methods of listening to digital radio. No particular economic risk has yet emerged related to this activity. On the internet, the Group also operates the websites of its radio brands. These sites offer image and content, with the aim of developing an audience through an advertisement business model. The market based on the advertising model is largely dominated by search-engine sites and by those sites which attract the largest number of monthly unique visi- 45

47 tors according to the Médiamétrie NetRatings ranking as used by advertisers. The contribution of this activity to the results of the Group, and consequently the economic risk, is limited. In television in France, the Group's main channel and source of revenues is NRJ 12, one of the free national digital terrestrial television (DTT) channels introduced in March 2005, which is still developing. In 2012, the Group was awarded a second free national channel, CHERIE 25, one of the six new HD channels introduced on 12 December It now operates three national channels, which include two free channels and one cable, satellite and ADSL channel (NRJ HITS), as well as a local DTTV channel for the Paris region (NRJ PARIS). In the television market, at this stage, the Group occupies a place as a new entrant with audience share that is still limited compared to the historical channels (see part 2.4 Activities and results). In terms of competitive positioning, note that the audiovisual sector saw the consolidation trend gain pace in 2011 and concern terrestrial television, with the DTT sector seeing the acquisition of TMC and NT1 by TF1 (operation announced in spring 2009), and the acquisition, in 2010, of the Virgin 17 channel (renamed Direct Star) by the Bolloré Group, and lastly, the acquisition in 2011 of Direct 8 and Direct Star by Canal +, (which were renamed D8 and D7 respectively). This triple movement marks the total (AB Group and Bolloré Group) or partial (Lagardère Group) withdrawal of three audiovisual groups from the free terrestrial television sector and the strengthening of the historical leading television groups. In this climate, NRJ GROUP remains one of only two independent free national terrestrial television players not to be backed by a historical television group. So, to prevent a possible situation of isolation, NRJ GROUP replied to the call for tenders launched by the Conseil Supérieur de l'audiovisuel for the allocation of new high-definition DTT channels and on 17 March 2012 it obtained a new free national channel, CHERIE 25. With a second national channel, the Group can continue developing in free national television by drawing on technical, programming and commercial synergies not only between the two national channels but also with the two other Group channels, NRJ HITS and NRJ PARIS. The competitive environment for television channels is also evolving at present with the arrival on the market of connected TVs. This new technology lets users access audiovisual content available on the Internet from their TVs. This still-emerging market has not disrupted the traditional market for free terrestrial television, the consumption of which continued to grow to record levels in 2011 and 2012 (see section Results of the Group's activities Significant events). However, depending on its development and the control that the channels have over it, connected TV could, in the medium term, constitute either a threat or an opportunity to acquire new audience potential, likely to impact the distribution of advertisers' advertising budgets. Owing to this, NRJ GROUP has already taken steps to anticipate the arrival and increased influence of "connected television". In October 2010, NRJ 12 signed the "connected TV charter" for industrial players and public authorities with the main TV players, aimed at setting out a framework for and harmonising the services offered through connected television receivers and, more specifically, ensuring that publishers retain full and exclusive control over any pop-ups shown on-screen on their station. Also, in order to prepare its presence in this market, as stated in part Results of the Group's activities Significant events, the Group continues to develop its applications for connected TVs, notably including the operation of additional interactive services such as "NRJ 12 replay" (for catch-up TV) and the brand's web radios. NRJ is currently the radio/tv publisher that is best represented, both in the HBBTV European standard and on the various proprietary TV portals, amongst all the major television brands. The catch-up offering is also available via the set-top boxes of the different cable and ADSL operators. Concerning the international radio activities, which represented nearly 11% of consolidated revenue in 2012, the Group manages different modes of operation according to the country or geographical zone (see part 2.4 Activity and results): direct operation is performed in the countries of the European zone that have a risk profile concerning the economic environment that is comparable to that described above for media activities in France, operation managed via partnerships or through license contracts has much more limited risk. Its other activities (Shows and Other Productions, and Broadcasting) represented around 16% of the Group's revenues in They operate in markets that are very different from those of media. Broadcasting, the Group's main recurring activity other than media (more than 12% of the Group's revenues in 2012), operates in the market for radio and television broadcasting, which is dominated by TDF (former government monopoly). This activity comprises radio and television broadcasting services for media operators. It involves the transport of signals, the hosting of audiovisual equipment, and the deployment, maintenance and operation of broadcasting networks. It offers good visibility on revenue insofar as the service contracts cover several years. Because of this, this activity is not sensitive to short-term economic uncertainty. It may be sensitive to the long-term economic health of its clients, media groups. The Shows and Other Productions activity involves recurrent brand licensing activity on the music market, which has a minor contribution to Group revenues but generates a high margin due to the brand licensing model. The level of royalties received depends on the number of compilations sold. This activity therefore presents a risk linked to the economic environment, i.e. household consumption: this is a minor risk for the Group. 46

48 The Group also operates, in a non-recurring manner, activities covering the co-production of musicals, for which the risk related to the economic environment is also that of household consumption. The maximum economic risk, as described below, nevertheless remains limited to the pre-production investment and commitments to hire venues Risks related to the economic model MEDIA BUSINESSES Among the media, radio is the Group's main business line, in which it is the leader in France and where it has achieved a high level of profitability. In particular, in television, the Group is developing a national channels division, which requires significant investment before reaching balance. In 2012, the Group was granted a new free national channel which will require significant investment before reaching breakeven. On the Internet, but to a lesser extent, the Group is currently investing to develop a service allowing the consumption of its media over the Internet and mobile Internet. This emerging activity has not currently generated sufficient revenue to cover the development costs. In general, the business of media publisher is based on an economic model with a high proportion of fixed costs, meaning costs not directly related to revenue. Therefore, any variation in revenue can have a strong impact on the results, assuming stable fixed costs. The Group points out, however, that a certain number of these fixed expenses may change in line with the resources that the Group wants to allocate to its activities or the general evolution of the price of goods and services purchased by the Group, or based on indexation rates for expenses that are index-linked, such as broadcasting charges. With regard to the latter, note that a significant share of the Group's radio broadcasting and a minority share of its TV broadcasting is carried out by one of its wholly-owned subsidiaries, towercast SAS. Concerning advertising revenues, in addition to the risks described in section above, it should be noted that the visibility time frame is limited to a few weeks, or even a few days, particularly for very responsive media such as radio or the Internet. In these media, the time frame and cost for preparing advertising campaigns is low, which allows advertisers to implement, or cancel, advertising campaigns within a few days. In television, visibility, although slightly superior to that seen in radio, remains limited. Because of this, the Group cannot reliably anticipate any trend for revenue. Among the variable costs that the Group is obliged to acknowledge, particularly in relation to the radio business in France, in application of Article L of the Intellectual Property Code, is fair remuneration for performing artists and producers of sound recordings, in return for programmes broadcasting sound recordings published for commercial purposes, to which the holders of related rights cannot object. This legal licence was extended by an act dated 1 August 2006 to the reproduction performed by or on behalf of an audiovisual communication company in order to play their own programmes broadcast on their channels. This remuneration, calculated as a percentage of turnover, is collected by the "Société de Perception de la Rémunération Equitable" (SPRE). From 1 January 2008, its scale has been the result of a decision by the commission created by Article L of the Intellectual property Code, dated 15 October 2007, published in the Official Journal on 6 November 2007, and for television, a decision by the same commission dated 19 May 2010 effective from 1 July Since 1 January 2008, the fee scale for radio has been variable, between 4 and 7% according to a scale. Previously, the fee was fixed at a rate of 4.25%. The expenses recorded for the SPRE in 2012 stood at EUR 8.2 million, representing 4.2% of the contribution to the consolidated revenues for radio activities in France (excluding dissimilar barter transactions). In 2011, the amounts recorded for the SPRE stood at EUR 9.2 million, representing 4.5 % of the contribution to the consolidated revenues for radio activities. The Group is also obliged to remunerate those holding the title to works in collections held by performing-rights societies, which are the SACEM, the SACD, the SCAM and the SDRM and, in certain cases, the producer companies (SCPP and SPPF), with which it has agreed, according to the activities concerned, general contracts for performance and reproduction, for authorisation to broadcast the works in their collections in consideration of payment of a fee calculated as a percentage of advertising revenues. Also, the Group carries out all appropriate negotiations with the companies that collect fees for copyright and related rights, according to the evolution and development of its activities, particularly on the Internet. In television, in application of law n d ated 25 December 2007 concerning the modernisation of audiovisual broadcasting and future television, the Group is liable for the COSIP (account in support of the audiovisual programmes industry) tax. This tax, calculated as a percentage of revenues, is applicable to television channels broadcasting works eligible for support by the Treasury's "Cinema audiovisual and local radio expression" special assignment account and, since 1st January 2009, works eligible for support from the national cinematographic centre (CNC). Also, law n dated 5 March 2009 relative to audiovisual communication and the new public television service, promulgated on 7 March 2009, established a new tax on the advertising revenues of television channels after deduction of amounts paid for the COSIP tax and after an allowance of 4% (see legal risks section 3.4.1). An upward revision of these scales would have an unfavourable impact on the financial performance of the NRJ GROUP. National / local In radio in France, as described in part 2.4 Activity and results, the Group is present both in the national radio advertising market and in the local and multi-local advertising markets. 47

49 National revenues are made from national advertisers and large and medium-sized companies. It primarily depends on the main economic trends as specified above in section Purely local revenues come from a large number of small and medium-sized local advertisers. It depends less on the wider economic trends in the different advertising sectors and has a more stable profile. In television, the Group's revenue to date has come mainly from the NRJ 12 channel, which is marketed on the national television advertising market. On the Internet, an activity that is still marginal at this stage, the Group operates on the national and local markets, notably through the development of commercial offers that allow the geo-location of advertising. Advertising department Mainly in France, the Group markets its advertising space itself through powerful national and local advertising departments employing nearly 380 sales people, including more than 290 in the regions. Because of this, in France where the Group carries out most of its activity, it does not bear any risk concerning the level of margin related to a renegotiation of marketing commission level. Advertising sectors and commercial dependency As stated in part 2.4 Activity and results, the primary advertising sectors differ according to media and vary according to their requirements in terms of communication and the regulatory constraints which are applicable to them. Also, without the Group being in a position of commercial dependence, several clients within the large advertising sectors may represent a significant share of its advertising revenues. In this context, operations to concentrate or combine brands, for example in the retail, telecommunications or cable-operator sectors, the end of certain government initiatives which had made it possible to revitalise a sector, such as the scrappage bonus scheme, and regulatory changes (e.g. possibility of using televised advertising) or changes to communications strategies (rebalancing in favour of new media, etc.), have in the past, and may in the future, affect revenues and consequently the profitability of the Group (see note in the notes to the consolidated financial statements). However, the choice of a commercial organisation that is integrated at the national and local levels, the large number of advertisers, the renewal of brands and the strong competitive environment, limit the risk of commercial dependence. Lastly, NRJ GROUP applies a policy of diversifying its clients, both through the conquest of new business sectors and through finding new clients within the advertising sector that traditionally invests in radio. BROADCASTING BUSINESS Concerning the broadcasting activity described in part 2.4 Activity and results, its economic model consists of marketing broadcast services, essentially FM radio and DTT in France, using a dense network of aerials and technical audiovisual equipment. At the end of December 2012, this technical infrastructure was installed on 624 sites spread throughout France including 40 sites wholly owned by towercast SAS, the other sites being rented from various lessors and TDF (231 sites exclusively dedicated to broadcasting DTT). For an equivalent number of aerials, each new service that generates revenues increases the income from this activity after considering the charges related to installing the new technical infrastructure (cost of deployment, investment and depreciation) and the charges related to the execution of the new service (rent, electricity, etc.). In FM, the network developed by towercast SAS covers about 85% of the French population (band II). The duration of contracts is the same as that for the transmission licences granted by the Conseil Supérieur de l'audiovisuel, with an initial period of five years. Historically in FM, the rate of turnover of contracts at the end of the period is less than 5%. It is therefore a business that is stable over time and which offers good visibility concerning revenues. In DTT, the period of contracts in the market is five years. Generally, in radio as in television, towercast SAS regularly invests in its infrastructure (i.e. aerials, buildings housing the electronics, electrical installations, etc.). After a year of lower investment in 2012, towercast is embarking on a new phase of development with the rollout of two new DTT multiplexes for the 6 new HD channels. towercast SAS is set to begin investing substantially once again in new infrastructures. In this strong development phase, the investments generate depreciation charges which reduce profitability. In 2013, towercast SAS will have new objectives to deal with related to the roll-out of two new multiplexes within a very short space of time in relation to the time taken to roll out the previous DTTV channels. In fact, the two networks are expected to be deployed within around two years, unlike the first which were deployed over six years. OTHER BUSINESS As stated previously, other entertainment activities are not individually significant on the Group scale, with the exception of the business producing or co-producing live shows, particularly the activity of co-producing large-scale musicals. This last activity involves a time lag between income and expenditure, because a large part of the expenses are engaged before performances begin, for the requirements of pre-production, namely designing and finalising the show: scenario and choreography, musical composition, casting, decor building and costume creation, etc. Income mainly comes from the sale of tickets and is unpredictable by nature. Note, however, that agreements have been established with the venues in order to benefit 48

50 from advances on receipts, which allow partial financing of pre-production expenses. Currently, the three musicals co-produced by the Group over the last six years (the most recent show "1789 Les Amants de la Bastille" is still running) have had commercial and economic success, in particular the musical "The Sun King", which reached a very high level of profitability due to its considerable commercial success and a controlled production budget. The musical co-production activity is a non-recurring activity: There was no musical in 2011 and the activity was not significant in 2010 (the musical "Cleopatra the last Queen of Egypt" halted in January 2010) OTHER ECONOMIC RISKS There are no assets used by the Group, the majority of which belong to directors or members of their families. There are no significant off-balance-sheet commitments that were not mentioned in the notes attached to the consolidated accounts. 3.2 OPERATIONAL, INDUSTRIAL AND TECHNICAL RISKS For the Group's main activities (radio and television), broadcast interruption is a major risk RISKS RELATED TO THE PRO- DUCTION AND BROADCASTING OF A RADIO SIGNAL The Group directly produces its radio programmes from its Paris site and its provincial sites for local programmes, particularly using the following technological resources: Digital or analogue studios in Paris and the provinces, Post-production rooms (control rooms) in Paris and in the provinces. The Group then subcontracts the transport and broadcasting of its radio signals. Note, however, that the Group itself performs a large part of the transmission of its radio stations through its subsidiary towercast SAS. In order to ensure that the Group's four radio stations broadcast continually in France, checks are made at all stages when producing and broadcasting signals. SIGNAL PRODUCTION Any exceptional event which causes partial or total unavailability, or major technical accidents in the Group's head office at rue Boileau in Paris where the Group's four national programmes are produced, would be likely to paralyse a large part of radio activity. With this in mind, significant protective and security measures have been implemented: Extra supplies of all of the technical materials used for the studios and to create signal are kept. Each station has a back-up studio and back-up programmes which are automatically triggered if a gap in broadcasting occurs, Continuous electrical power is provided through the presence of an electrical generator and a first-level uninterruptible power supply. The Central Control Room, through which the four radio signals transit, is fully secured thanks to cameras and restricted access by badge to authorised persons, A dual system of air-conditioning is in place to ensure that transmission equipment continues to function during heatwaves affecting the Central Control Rooms. Maintenance teams are present from 05:00 to 21:00 each day and telephone standby is in place outside these times, All audio signal production equipment are subject to a maintenance contract offering 24-hour/7-day assistance on all strategic content product platforms, In case of the total unavailability of the headquarters facilities, for example in the case of a large fire or major flood, a backup musical broadcast system is operational from the "Les Mercuriales" site at Bagnolet (Paris), which has automatic broadcasting servers with 24 hours of material for each channel, including advertising. This system is the subject of operational tests, Beyond 24 hours for the resumption of a live programme or in case of the concomitant unavailability of the main building and the "Les Mercuriales" site, in 2010, the Group deployed audio under IP technologies to all of its main provincial studios, allowing daily programme broadcasts to be maintained for the Group's radio stations from Rouen for RIRE & CHANSONS and from Lyon for NRJ, NOSTALGIE and CHERIE FM. Protective measures also cover the buildings and technical installations within which local programmes are prepared. The equipment necessary for producing and broadcasting the signal is maintained regularly by specialised teams. In case one of the local stations breaks down or becomes unavailable, the national station automatically takes over, thus avoiding any station going off the air. SIGNAL TRANSPORT AND BROADCASTING In France, the Group's programmes are broadcast by transmitters installed throughout the national territory. The transport of signals to the broadcasting sites located regionally is overseen by towercast SAS in collaboration with GLOBECAST, via AB 3 satellite in FM/IP/DVB, a new architecture the backbone of which was activated in the second half of The national deployment of this new solution to the different broadcasting sites will be completed in the first quarter of The routing of the signals to the AB 3 satellite, their transport and the processing of the corresponding sounds to feed ground transmitters is therefore the responsibility of towercast SAS in association with GLOBECAST. The signals are routed to the site in Paris for redundant transmission to the satellite via microwave link and secured fibre optic loop. The national network head is also redundant. Switchover to a backup satellite uplink is available in case the main site fails. 49

51 If the satellite were to fail, programmes would no longer be broadcast to the provinces. In this context, a backup solution is provided through a contract with GLOBECAST so that, where necessary, the signals can be switched over to a satellite of the same capacity. In case the satellite goes down, GLOBECAST is contractually committed to finding a backup solution as quickly as possible. NRJ GROUP is therefore in a situation of dependence for the transmission of signals to local radio stations outside the Paris region. Nevertheless, certain sites are equipped with back-up systems that allow continuity of programme transmission. In the regions, the two main broadcasters are TDF and towercast SAS. Concerning towercast SAS, all broadcast sites are equipped with professional and modular equipment providing high reliability. Regular maintenance of this equipment is also provided by dedicated technicians located in the regions. Furthermore, for real-time information on the state of functioning of installed equipment, a large number of the transmitters are fitted with an intelligent remote surveillance system connected to a supervision centre in Paris. In case a transmitter breaks down, the prejudice is proportional to the number of listeners served by the transmitter. This is why an emergency plan has been prepared to re-establish the service as quickly as possible and ensure continuity of broadcasting. For example, this plan provides for the deployment of mobile aerials, or the use of aerial suppliers. Bearing in mind the large number of listeners in the Ilede-France region, in addition to the main broadcast site on the Eiffel Tower, there is the "Mercuriales" backup site in Bagnolet, both of which are redundantly supplied by the microwave link and secured cables directly from the Group's headquarters at rue Boileau in Paris. These two broadcast sites have backup transmitters and autonomous electrical power RISKS RELATED TO THE PRO- DUCTION AND BROADCASTING OF A DIGITAL TELEVISION CHANNEL In order to ensure that the Group's television channels broadcast continually in France, checks are made at all stages of production, transport and broadcasting of signals using internal monitoring procedures or drawing on the supervision methods of external service providers. Signal production Any event that might cause partial or total unavailability or major technical accidents at the Group's building in Avenue Théophile Gautier in Paris, where the programmes for the Group's 4 television channels are produced, would be likely to paralyse most of the television activities. With this in mind, significant protective and security measures have been implemented: The vital equipment, particularly the broadcast servers, is secured and redundant. Secured electrical power is provided to all active elements in the chain. Furthermore, access to technical premises is limited to authorised persons via a badge system, The programme stock is archived locally and the Group has duplicated this stock at a remote site in a secured data centre, The transmission equipment in the final production department common to NRJ 12, NRJ PARIS, NRJ HITS and CHERIE 25, particularly the video servers, is totally redundant (locally) with transparent automatic switching systems. Furthermore, the Group has set up a business continuity plan for the final production department on a remote site, so that this site can take over the broadcasting of programmes within a maximum of 4 hours in case the building at Avenue Théophile Gautier becomes unavailable. For common operation of the technical solutions implemented within the Group's television division, specialised personnel are permanently present within the final production department to carry out broadcast checking operations and maintenance. The operating personnel at the final production department are present 24 hours a day and seven days a week. Transporting and broadcasting signals To guarantee the transmission and national broadcasting, primarily via DTT, cable, ADSL and satellite, of its four channels, the Group uses different categories of technical assistance: The Group directly produces its television channels from its Paris site, mainly using the following technical resources: A High Definition platform, A high-definition production department, A control department which carries out checks on broadcasting, Post-production studios. The transport and broadcasting of the signals is then assigned to external contractors. It should be noted that a small part of NRJ 12's terrestrial broadcasting is overseen by the Group itself through its subsidiary towercast SAS. The network operators oversee the majority of technical operations (coding, broadcasting) on the transmission networks (satellite, ADSL, cable and fibre optic). TF1 operates the network head for compression/multiplexing from Boulogne for NRJ 12 and CHERIE 25, Within the framework of the SMR6 multiplex, GLOBECAST is responsible for the NRJ 12 uplink from Boulogne to the EUTELSAT W5 satellite, Within the framework of the MHDT multiplex, AR- QUIVA is responsible for the CHERIE 25 uplink from Boulogne to the EUTELSAT W5 satellite, TDF, towercast SAS, Itas TIM and ONECAST (subsidiary of TF1) carry out national DTT broadcasting of NRJ 12 and CHERIE 25 in DVB-T via terrestrial sites, The CanalSatellite digitisation Centre operates the NRJ HITS, NRJ 12 and NRJ PARIS network heads and the uplink to the ASTRA satellite, which provides the CanalSatellite and DTT SAT range of programmes, ARQUIVA operates the network head (encoding, encryption and multiplexing) and HD uplink for CHERIE 25 on the ASTRA satellite which feeds the 50

52 CANALSATELLITE and DTT SAT programmes and operates under a shareware agreement with Numéricâble, Eutelsat operates the network head and the uplink to the EUTELSAT W5 satellite for NRJ 12 and CHERIE 25, thereby addressing the Fransat cluster, CanalSatellite directly carries out the encoding, multiplexing and encrypted broadcasting for NRJ 12, NRJ PARIS and NRJ HITS for its satellite and ADSL services, NRJ 12 and CHERIE 12 are transmitted in High Definition on dedicated optical fibres from the Group's TV division to the various ADSL and cable operators. GLOBECAST operates the link to the EUTELSAT W5 satellite for NRJ 12 via the DTT SMR6 multiplex from an installation that is redundant at the level of the modulator and the power stages. The main broadcasting site, located in the Sainte Assise district, is backed up by a second remote site in Aubervilliers. There is an emergency electrical power supply. The secure transmission, which cannot be intercepted, is sent to the satellite which feeds the terrestrial sites. In case a satellite repeater fails, another repeater immediately takes over. In case the satellite fails completely, NRJ 12 has a contract with TDF for a backup ground link using the IP fibre-optic network (TMS) serving the main DTT broadcast network, covering over 85% of the population. ARQIVA operates the uplink to the EUTELSAT W5 satellite for CHERIE 25 via the DTT MHD7 multiples from an installation that is redundant at the level of the modulator and the power stages. TDF operates a back-up satellite station which can be switched on immediately if ARQIVA's were to become unavailable. It should be noted that the Eiffel Tower site is not fed from the satellite, but directly from Boulogne by the network head operated by TF1 via a broadband optical fibre secured by a microwave link. The equipment in the CanalSatellite and Eutelsat digitisation centre is totally redundant, both concerning the coders and the satellite uplink to ASTRA. The various network heads make use of redundant equipment, both for the video encoders and the multiplexer. The switch-over is automatic in case the supervision equipment detects that an element has broken down. Access to the premises housing the network heads is via a double door with biometric identification. Once multiplexed, the signals leave on two optical fibres over different routes to the CANALSATELLITE, GLOBECAST, ARQUIVA and EUTELSAT (where relevant) centres. For broadcasting NRJ 12 and CHERIE 25 as DTT, the broadcasters TDF, towercast SAS, ITAS TIM and Onecast operate various broadcasting sites throughout France where the ground transmitters are located. These are redundant at the level of their modulators and most of them are redundant in their amplification stages for the high-powered sites. The client supervision systems provided by the broadcast service-providers provide the channels with real-time information on the state of their DTT broadcast network. For NRJ PARIS, the MULTI-7 multiplex transporting the channel signal is routed from the ARQUIVA centre in Vélizy to the Eiffel Tower using two optical fibres (primary and backup). DTT is broadcast from the Eiffel Tower by TDF under the MULTI-7 multiplex. In addition to DTT for the Paris region, cable and ADSL networks, NRJ PARIS is also present on ASTRA satellite via CANALSATEL- LITE. Note finally that NRJ PARIS uses a primary optical fibre and a backup optical fibre for the link from its final production department to its DTT network head operated by ARQUIVA in Vélizy RISKS RELATED TO BROADCAST- ING ADVERTISING Advertising constitutes most of the Group's revenues. The process of producing and broadcasting advertisements is the subject of particular attention. Every day, in radio, the Group must process a very large number of advertising spots through its national and local radio stations. Specialist departments in Paris, Rouen, Lyon and Montpellier are responsible for digitising the sound associated with each campaign, preparing the advertising screens for broadcast and monitoring invoicing. Ad hoc software resources automate a certain number of operations and carry out numerous checks. In order to secure the broadcasting process, several systems have been put in place within the Group, particularly the digitisation and backup on redundant servers of the sound for the advertising spots. In 2012, the "HORNET" project, implemented by the Information Systems Department, secured improved transmission of local advertising by making the telecommunication links to the Group's local aerials redundant. All tools for producing and broadcasting advertising messages are the subject of a dedicated maintenance contract, including maintenance 24 hours a day and seven days a week and a Guaranteed Restoration Time (GRT) of 4 hours. In television, the vast majority of advertising films are now received directly by IP in the definitive digital format (broadcast format ready to show) and backed up after being checked on redundant servers RISKS RELATED TO INFOR- MATION SYSTEMS The Group depends ever more on integrated software packages of the ERP type, particularly for its invoicing and financial reporting processes, and on which it relies in certain of its operational decisions. Any breakdown of these applications or data-communication networks could delay or bias certain decisions and lead to financial loss for the Group. ERP OPERATIONS All of the French subsidiaries, excluding the musical production and soundtrack activities, use the same integrated IT system (SAP). 51

53 The main functionalities developed concern purchases, media sales and accountancy/finance. The integrated SAP information system enables better visibility and enhanced control over a significant share of the Group s sales and recurring operating expenses. It thereby contributes to the Group s internal audit process, particularly in the following areas: - access control, - uniqueness of database, - data reliability, - traceability of data in terms of integration, - processes and document flows, - access to information in real time, - approval of commitments, - optimisation of contract management and invoicing. IT SECURITY To safeguard information system security and protect their users, the Group has formalised rules governing their use (IT charter, internal audit procedures), aimed at setting out the main operational precautions and recommendations that must be followed by all users of information systems within the Group. More specifically, these rules make it possible to protect the Group against IT attacks (antispam, antivirus, firewall software), sensitive data loss (regular backups) or discontinuity in terms of its operations (electrical hazards, interruption of broadcasting). The Information Systems Department is responsible for ensuring compliance with the in-house rules governing use of information systems within the Group DEPENDENCY ON SUPPLIERS In order to prevent any risks of dependency on certain suppliers, the Group's Procurement Department ensures continuity of service, security of supply and financial conditions. Through its constant action concerning the quality/price ratio of suppliers, it contributes to improving the Group's economic performance and maintains suppliers in a situation of healthy competition. At Group level in France, the following is a breakdown of the main suppliers in terms of the percentage they represent of the total amount of payments made over the year: In % Proportion of main supplier 15% 15% Proportion of 5 main suppliers 31% 30% Proportion of 10 main suppliers 45% 40% The commercial relationships of the Group with its main supplier are the subject of numerous contracts. These contracts are signed for a period of 5 years. The prices are the subject of indexing RISKS RELATED TO THE ORGAN- ISATION OF EVENTS AND SHOWS Alongside its principal activity (radio), the Group organises a certain number of events, concerts or shows, aiming to promote the brand image of its radio stations or offer its customers communications solutions to supplement a radio campaign. In both cases, these events are financed entirely or partially through advertising revenues. Through the organisation of these events or as a coproducer of shows of the musical type, the Group is particularly exposed to the following risks: Risk of cancellation: the successful execution of an event can depend on a certain number of factors that are outside the Group's control, such as the actual presence of the artists, the weather, the delivery of certain equipment, etc. In the event of the cancellation of an event for the aforementioned reasons, the Group could lose advertising income, whereas it has incurred expenses. As required, the Group covers this type of risk by taking out ad hoc cancellation insurance. Image risk: for the events and shows it organises, the Group may invite a large or small audience and as such is exposed to risks relating to the safety of such people. Within this framework, it seeks to ensure strict compliance with the safety rules which apply for event organisation. However, since the risk of an accident cannot be ruled out entirely, the Group takes out ad hoc insurance covering the financial and human resources making it possible to take care of any victims. 3.3 ENVIRONMENTAL RISKS The business of producing radio signals by NRJ AUDIO SAS has no significant impact on the environment. However, the business of transporting and broadcasting radio signals performed by towercast SAS is likely to have an impact on the environment, as described hereafter MEASUREMENT OF MAGNETIC FIELDS Electromagnetic transmissions raise questions concerning the long-term effects that this radiation might have on health, although currently no scientific study has proved that this is indeed the case. In Europe, on 12 July 1999, the Council of the European Union adopted a recommendation aiming to limit the public's exposure to electromagnetic fields. The purpose of the recommended exposure limits is to ensure that exposure is sufficiently below the levels for which biological studies have shown a reproducible harmful effect. Two safety margins have been determined: the first concerns persons working on the transmitters, and the second concerns the public. Also, Directive 2004/40/EC concerning the exposure of workers to risks caused by physical agents (electromagnetic fields) concerns exposure in professional environments and was to be transposed to French law before 30 April This transposition has not taken place to date. 52

54 In France, the regulations relative to the protection of the public against electromagnetic fields are based on several laws: The Decree dated 3 May 2002 (n ), which transposed into French law the European recommendation on limit values for exposure of members of the public to electromagnetic fields transmitted by equipment used in telecommunications networks or in radio-electrical installations, Decree dated 8 October 2003 (n ) which complements the regulatory measures relative to public protection, defines the Specific Absorption Rate (SAR) as the unit for measuring exposure and specifies criminal penalties in case equipment is activated which does not comply with the limit values, Decree dated 8 October 2003, which sets the limit values for public exposure for compliance by radioelectrical terminal equipment for activation and use in France, Decree dated 3 November 2003 (amended by the Decree dated 12 December 2005), concerning the protocol for on-site measurement of transmitting stations and setting compliance with limits, in terms of reference levels and public exposure to electromagnetic fields, as specified by decree n dated 3 May 2002, Decree dated 4 August 2006 specifying the procedures for carrying out measurements of electromagnetic fields under Article L of the public health code, stating that Prefects may stipulate measurement of electromagnetic fields at the expense of operators, Decree dated 4 August 2006 defining the content and procedures for transmission to the Mayor, under Article L.96-1 of the Postal and Electronic Communications Code, of the document giving the assessment of one or more radio-electrical installations operated within the municipality. With regard to this regulation, towercast SAS, as an operator of sites broadcasting electronic communications, must make sure that the public's level of exposure to electromagnetic fields is less than the limit values set in the appendix to Decree n If the occasion arises, when measurements of fields on each site are carried out, they must be recorded in a document to be produced to the French Frequency Agency and communicated to the operators of such aerials. The law of July 2001 already called for operators to give the characteristics of their equipment in an appendix to the agreements made with their lessor (owner or manager of site). The sites operated by towercast SAS that have at least two FM electronic broadcasts have their electronic fields measured upon request. In accordance with the legislative requirements, the organisations that measure these electromagnetic fields (APAVE and VERITAS) have obtained COFRAC certification. Under a continuity plan, towercast SAS must check, before activating any new broadcast service, that the contribution of the electromagnetic fields does not cause the limits for public exposure, set by Decree dated 3 May 2002, to be exceeded. In addition, upon written request, any person and any mayor who wonders about the level of the electromagnetic field at their place of residence, their place of work, their children's school or, more generally in any living area, can obtain a tangible response expressed in V/m (volts per metre) and as a percentage of the limit value set by the regulations OTHER MEASURES FOR PRO- TECTING SITES AND EMPLOYEES Alongside its legal and regulatory obligations, towercast SAS is continuing the process of improving the security and quality of its transmission sites. Following a review of the Group's active sites, completed at the end of 2008, the Company has implemented maintenance plans and checks to ensure the longevity of structures and identify the risks relative to safety and the environment on the sites where it operates. Also, since 2005, towercast SAS technicians have benefited from an ongoing training and authorisation plan concerning security. Employees continue to be educated on the environmental impact of their activity OTHER ENVIRONMENTAL MEASURES Other than the effects of the magnetic fields mentioned above, the Group's activity does not have any particular impact on the environment. However, NRJ Group makes its employees aware of behaviour for preserving the environment, particularly concerning saving paper and sorting waste. 3.4 LEGAL RISKS RISKS RELATED TO REGULATION Generally, the Group operates within a legal and regulatory framework that governs the media, preventing dominant positions and the risk of excessive influence. As for any sector of activity, a major change in these regulations could significantly influence the economic and competitive situation. In particular, the assignment of new licences to transmit radio and television would be likely to change the competitive landscape. RADIO IN FRANCE Transmission licences NRJ, NOSTALGIE, CHERIE FM and RIRE & CHAN- SONS are subject to the clauses of law n date d 30 September 1986 relative to the liberty of communication, modified and supplemented, and to the clauses of secondary legislation that organises the supervision of the sector. Within this framework, it is necessary to obtain a transmission licence to operate an FM frequency in a given region. This authorisation is granted "in consideration of 53

55 the person of the parties" and for a given programme. Consequently, any substantial change of control of the entity to which the licence was assigned, the conditions of operation, or the programme, is subject to the agreement of the supervisory authority, otherwise the licence may be withdrawn. Since 1 February 1994, licences have been granted for a period of five years, renewable twice automatically. As they reach their expiry, calls for tenders are initiated by the Conseil Supérieur de l'audiovisuel to proceed with delivery of new licences in the departments concerned. The transmission licences nevertheless remain sustainable for the long term. Although, in the past, renewals have not been automatic at the legal level, they have always taken place, providing the holder complies with the conditions of the licence, as evidenced by the constant increase in the number of transmission licences that the Group holds. In 2012, 7 new licences were delivered concerning all of the Group's networks. Moreover, the Conseil Supérieur de l Audiovisuel authorised in February 2012, a change in category from D to C of the NRJ radio service in La Rochelle At the end of 2012, the four radio stations controlled by the Group had 857 licenses to transmit in France (including 63 transmission licences operated by franchise holders). The renewal periods are as follows: Total number of transmission licences In less than a year Renewal period In more than one year and less than 5 years In more than 5 years 857 licences 211 licences 498 licences 148 licences 54

56 Digital terrestrial radio On 2 December 2008, after the call for tenders on 26 March 2008, the Conseil Supérieur de l'audiovisuel accepted the Group's application to transmit 7 digital terrestrial radio (DTR) services in 19 large towns covering 30% of the French population. To ensure rapid DTR roll-out, the Conseil Supérieur de l Audiovisuel decided in the end to restrict the geographical scope of this invitation to tender to three zones: Marseilles, Nice, Paris. Because of the change in environment between 2009 and 2012, linked notably to the disappearance of certain radios selected by the Conseil Supérieur de l Audiovisuel on 26 May 2009 and the change in available resources likely to be awarded, the Conseil Supérieur de l Audiovisuel amended its invitation to tender in a decision dated 12 April NRJ decided to withdraw its tender in May 2012 due to the significant level of economic and technical uncertainty surrounding the DTR project. On 15 January 2013, the Conseil Supérieur de l Audiovisuel delivered 107 authorisations to operate a digital terrestrial radio service. NRJ believes that these authorisations are illegal because of the considerable level of uncertainty surrounding the project. Consequently, it requested that the Conseil Supérieur de l Audiovisuel withdraw these authorisations in an appeal lodged on 8 March Non-compliance with broadcasting obligations When a frequency is assigned, each holder signs an agreement with the Conseil Supérieur de l'audiovisuel and undertakes to respect a certain number of obligations and rules. Licence holders are solely responsible for programmes broadcast on their channels, however they were produced. They must also send a report each year on the execution of their obligations during the previous year, and be able to provide the Conseil Supérieur de l'audiovisuel with all information allowing it to check compliance with their obligations. In cases where the licence holder does not comply with their obligations or in the event of a false declaration, the Conseil Supérieur de l Audiovisuel may apply sanctions, where an order to fulfil said obligations has been ignored: suspension of authorisation for a maximum of one month, a fine, reduction of the authorisation term limited to one year. In order to comply with these obligations, the Group, as it wishes to broadcast content that is appropriate to its values, carries out follow-up monitoring of its programming and listens carefully to opinions about its radio stations. Presentation rules have been laid down and checks are made, both nationally and locally, on how the presenters conduct their programmes. INTERNATIONAL RADIO Transmission licences The Group's international development takes place mainly under the NRJ/ENERGY and NOSTAL- GIE/NOSTALGIA brands. Generally, the European countries where the Group is present have audiovisual regulations applicable nationally. However, in Germany, a federal country, it is the various regions (14 Länders) that set the applicable regulations and are responsible for nominating their own regulatory authorities. Depending on the country, transmission licences are granted for variable periods, generally of between four and ten years. Bearing in mind the date when international business began (1991), the various stations which have opened since then, and the renewals already obtained, the requests for renewals or reassignments of the frequencies corresponding to current licences are spread over a period until Germany In Germany, the licences to transmit expire between 2014 and The following were renewed in 2012: The Munich licence held by RADIO 93.3 MHZ MÜN- CHEN GmbH which is 80% owned by NRJ GROUP, for a new term of 4 years until 30 November 2016, The Nuremberg and Erlangen licences, held by RA- DIO MHZ NÜRNBERG GmbH, which is wholly owned and controlled by NRJ GROUP, for a new term of 4 years until 31 October Renewals anticipated in 2014 concern the ENERGY licenses in Saxony which are held by companies in which NRJ GROUP is a minority shareholder. Austria In Austria where the Group was already present in Vienna, Salzburg and Innsbruck, NRJ GROUP acquired 5 companies at the end of 2010, including: IQ-PLUS MEDIEN GmbH which operates RADIO GRAZ and notably covers Graz, the country's third largest city, 3 sub-branches of IQ-PLUS MEDIEN GmbH which operates RADIO EINS in other areas of Styria, including Bruck an der Mur. The licences to transmit in Vienna and Bruck an der Mur/Mur-Mürztal were renewed in 2011 for a period of 10 years until 21 June The licence to transmit in Salzburg was renewed in 2012 for a period of 10 years until 1 October The licenses to transmit in Innsbruck, Graz and other areas of Styria remain valid until 24 September 2017, 18 October 2017 and 1 April 2018 respectively. 55

57 Belgium In French-speaking Belgium, NRJ BELGIQUE SA and NOSTALGIE SA, with the latter 50% controlled by the Group, each obtained one of the four community networks, by decision dated 23 October 2008 taken by the Conseil Supérieur de l Audiovisuel (CSA). Various appeals have been lodged against this decision, two of which were still before the Council of State on 31 December Since then: - In a decree dated 18 January 2013, the Council of State quashed the appeal that had been made by SA JOKER FM (MINT format) against the CSA's decision on 23 October 2008 concerning NRJ BEL- GIQUE SA. - In a decree dated 31 January 2013, the Council of State also quashed the appeal that had been made by SA CIEL IPM (TWIZZ format, formerly CIEL) against the CSA's decision concerning NOSTALGIE SA et NRJ BELGIQUE SA. Following these two Council of State rulings, the award of the third and fourth frequency networks in Frenchspeaking Belgium, respectively NOSTALGIE SA and NRJ BELGIQUE SA, was definitive. At 31 December 2012, NRJ BELGIQUE SA and NOS- TALGIE SA respectively held 39 and 45 licenses to transmit, all of which are valid until 21 July NOSTALGIE SA also has a 50% investment in the capital of VLAANDEREN EEN NV, the other 50% shareholder in this company being CONCENTRA NV. Since 20 March 2008, VLAANDEREN EEN NV has been broadcasting a NOSTALGIE programme to Flanders. The licence to transmit runs until September German-speaking Switzerland In German-speaking Switzerland, on 15 January 2010, the Federal Department of the Environment and Transport, Energy and Swiss Communication (DETEC) authorised the transfer of licence n 24 allowing tr ansmission over the Zurich region to ENERGY ZURICH AG (formerly RADIO Z AG). Following the end of the appeal period, this licence came into force in March 2010, enabling ENERGY ZURICH to continue operating. This licence is valid through to 31 December For reference, the Group has a minority interest of 49% in ENERGY ZURICH AG, with the other shareholder - the RINGIER AG group - having a 51% stake in the capital. At the beginning of 2012, NRJ GROUP and its partner RINGIER AG indirectly took a minority stake respectively 5.2% and 9.8% in ENERGY Basel AG (formerly ME- DIA CLEARING CENTER AG). Following receipt of authorisation to transfer the RADIO BASEL AG licence from the Office Fédéral de la Communication (O.F.C.O.M) on 15 August 2012, ENERGY BA- SEL AG now directly holds the ENERGY Basel license which is valid until 31 December Similar to ENERGY ZURICH AG and ENERGY BERN AG, the latter being 100% controlled by RINGIER AG, ENERGY BASEL AG signed a brand licence contract with ENERGY HOLDING SCHWEIZ AG, which holds the ENERGY licence for German-speaking Switzerland and is 35% controlled by NRJ GROUP and 65% controlled by RINGIER AG. As part of the above mentioned licence agreement, EN- ERGY is present in the three largest cities of Germanspeaking Switzerland: Zurich, Basel and Bern. Finland In Finland, in addition to the 37 historical licenses that broadcast the NRJ format, notably in Helsinki, and granted to NRJ FINLAND OY AB, which is 100% controlled by NRJ GROUP, a new licence was obtained for the introduction of RADIO NOSTALGIA in February 2011, in the greater Helsinki region. On 31 December 2012, given the 9 licences obtained in 2011 and the licence obtained definitively in Kuusamo in 2012, NRJ holds 47 licences corresponding to technical coverage of 93% of the Finnish population. For its part, on 31 December 2012 RADIO NOSTALGIA held 6 licences of which 2 new licences obtained in 2012, bringing its technical coverage to 47% of the Finnish population. The 53 licences held by NRJ FINLAND OY AB are valid until 31 December Norway In Norway, ENERGY HOLDING NORWAY AS, which is 100% controlled by NRJ GROUP, holds 5 licences and transmits in NRJ format in Oslo, Bergen, Stavanger, Trondheim and Røken & Hurum. These licences, through which NRJ covers 40% of Norway's population, were all renewed at the end of 2009 for a period of 7 years, i.e. until 31 December Sweden In Sweden, RBS BROADCASTING AB, which is 100% controlled by NRJ GROUP, holds 20 licences which are valid until 31 July 2018, having been renewed in July Since 1 January 2013, as part of the partnership signed with SBS RADIO AB, which notably develops the MIX MEGAPOL, ROCKLASSIKER and VINYL formats, RBS BROADCASTING AB has transmitted: - in NRJ format in 16 cities, including Stockholm, Gothenburg and Malmö, - in MIX MEGAPOL format in 3 cities, - and in VINYL format in one city. Moreover, also under the partnership agreement with SBS RADIO AB, the NRJ format is also transmitted in 6 other cities. 56

58 At the end of 2012, the Swedish radio and television authority issued a request for information concerning this partnership, which moreover is also being examined by the Swedish competition authority. Overall, since 1 January 2013, 70% of the Swedish population has been able to listen to NRJ compared with 40% on 31 December 2012, since the NRJ format was previously broadcast only in Stockholm, Gothenburg and Malmö as part of the previous partnership agreement signed with MTG. In summary, the following table shows the current status of the international licences: Country Format Number of active licences Less than or equal to one year Number of companies at 31 December 2012 Over one year and less than or equal to 5 years Over 5 years Germany (except Saxony): ENERGY: (i) 3 Austria ENERGY: Sweden NRJ Norway NRJ 5 5 Finland NRJ Finland NOSTALGIA 6 6 Belgium NRJ Belgium NOSTALGIE (i) of which 8 licences allocated to FRANKFURT BUSINESS RADIO GMBH & CO. BETRIEBS KG which was sold in the first quarter of TELEVISION Transmission licences Group channels Date transmission licence obtained Date transmission licence effective NRJ 12 10/06/ /03/2005 Period of transmission licence 10 years (renewable twice for 5 years) Expiry of transmission licence* 30/03/2025 NRJ HITS 12/04/ /04/2007 5,6 years, then 4 years 31/12/2017 NRJ PARIS 24/07/ /03/ years (renewable twice for 5 years) 19/03/2028 CHERIE 25 (corporate name CHERIE HD) 03/07/ /12/ years (renewable twice for 5 years) 11/12/2032 * subject to renewal At the end of 2012, two appeals were lodged with the Council of State against the licences delivered by the Conseil Supérieur de l Audiovisuel SA to CHERIE HD SAS, owner of the CHERIE 25 programme. The Group's four channels - NRJ 12, CHERIE 25, NRJ PARIS and NRJ HITS - are subject to the clauses of law n dated 30 September 1986, modified and supplemented. NRJ 12, CHERIE 25 and NRJ PARIS were authorised by the Conseil Supérieur de l'audiovisuel to make respective use of part of the radio spectrum in digital mode in accordance with Article 30-1 of the said law. Law relating to audiovisual communication and the new public television service, and the decree modifying the regime applicable to televised advertising, televised sponsoring and television shopping. The law n dated 5 March 2009 relative to audiovisual communication and new public-service television was promulgated on 7 March In digital mode, the same frequency in a given zone is shared by five or six channels grouped in a multiplex. The frequencies are therefore used in common with the other channels grouped within the same multiplex. NRJ 12 has also concluded an agreement with the Conseil Supérieur de l Audiovisuel that sets the rules applicable to the NRJ HITS service, it being a service distributed by cable and satellite that does not use the frequencies assigned by the CSA. 57 Among other things, this law covers: (i) the reform of the public television service, partially abolishing commercial advertising on the France Télévisions national channels between 20:00 and 06:00, (ii) the establishment of a new tax on television channel advertising revenues in order to contribute towards financing the removal of advertising from public channels,

59 (iii) the introduction of a second advertisement break in television and cinema productions, (iv) Concerning the tax on revenues indicated in (ii) and defined by Article 302 ii KG of the French general tax code (Code Général des Impôts), the rate retained is 3%, but this has been reduced by law n dated 29 December 2010 setting out the French Finance Act for 2011: to 0.5% from 2010, and to 0.25% in 2010 and 2011 for television services other than terrestrial broadcasts in analogue mode, provided that advertising has been removed from programmes shown between 06:00 and 20:00 on France Télévisions' public channels. The basis for the calculation is the amount exceeding EUR 11 million paid by advertisers, ex-vat, after deducting the amounts paid for the COSIP tax and after a flat-rate allowance of 4%. The Finance act for 2011 (act n ) postpone d the total abolition of advertising on the public channels to 1 January Compliance with broadcasting obligations The Group's four channels concluded an agreement with the Conseil Supérieur de l'audiovisuel to apply the rules specified by law n dated 30 September 1986 (amended) relating to the freedom of communication and its implementing orders. This primarily concerns: for NRJ 12, CHERIE 25 and NRJ PARIS, rules on the use of the radio spectrum, for the four channels, ethical rules: respect for people, plurality of information and opinion, protection of children and obligations related to programmes: format of the channel, broadcasting quotas and obligations concerning investment in film and television productions. According to the terms of this agreement, the channels are solely responsible for the programmes broadcast on their stations. They are subject to inspection by the Conseil Supérieur de l'audiovisuel concerning compliance with their broadcasting obligations and, in this respect, each year they must send the CSA a report covering their activities for the previous year. In case of non-compliance by the holder with one of the stipulations of the agreement, or in case of false declaration, the Conseil Supérieur de l'audiovisuel may impose penalties after formal notice. These penalties are graded in accordance with the seriousness of the breach: suspension of publishing, broadcasting, distribution of the service, category of programmes, part of the programme or one or more advertising sequences, for one month, financial penalties, reduction in the licence period within the limit of one year, or withdrawal of the licence. Under their agreements with the Conseil Supérieur de l'audiovisuel, respectively dated 10 June 2003 for NRJ 12 and 2 July 2012 for CHERIE 25, and as provided for under Decree n dated 17 January 1990 (amended ) relating to the television broadcasting of audiovisual and cinematographic works, NRJ 12 and CHERIE 25 are required to set aside: within the total time dedicated annually to the broadcasting of audiovisual productions: at least 60% of this time to the broadcasting of European works and 40% to the broadcasting of original French works, in terms of the total annual number of broadcasts and replays of lengthy cinematographic works: at least 60% of this total to the broadcast of European works and 40% to the broadcast of original French works. These obligations may cause difficulty given the competitive environment. This is because: Those involved in the market have an economic interest in offering the contents of their catalogue to the powerful players first, and these have preference, for all of their channels, concerning the available programmes. This gives them a certain degree of control concerning future programmes and blocks access to any new channel that tries to acquire them, The historical players in the French market are the primary producers of original French audiovisual works. Since these requirements may prove to be inflationary due to competitive pressure on pre-existing catalogues on the market, NRJ GROUP has adopted a strategy aimed at meeting a significant part of its needs for French audiovisual works through its own productions, using a very wide range of supplier-producers to achieve this. This policy is enabling the Group to limit the risk of seeing an increase in the cost of its programming schedule, as well as the risk of dependency in relation to one single producer or a small number of dominant producers for one or more timeslots in the programming schedule. Compliance with obligations for the production of audiovisual and cinematographic works The agreements signed with the Conseil Supérieur de l'audiovisuel also stipulate the obligations of the Group's channels in terms of the production of audiovisual and cinematographic works. Compliance with this legal obligation to support the production of audiovisual and cinematographic works requires a minimum level of investment, calculated according to a percentage of net revenues for each channel, for the previous financial year. Two professional agreements, the first covering the contribution towards audiovisual production for channels broadcast by digital terrestrial means, and the second covering the contribution towards the audiovisual production assets for these channels, were concluded on 22 October 2009 between the free DTT channels, including NRJ 12, the performing-rights societies and the producer unions in view of changes to the clauses of decree dated 28 December 2001, applying to publishers of digital terrestrial television broadcast services ("DTT" decree). The latter decree was repealed and replaced by Decree no dated 2 July 2010 relating to the contribution of audiovisual and cinematographic works for terrestrial broadcast television services, incorporating the provisions of such professional agreements and setting one single 58

60 system to apply for all the terrestrial services broadcast, analogue or digital, national or local, public or private, in France and overseas. Under this decree and the decision of the Conseil Supérieur de l Audiovisuel dated 18 October 2011 related to the invitation to tender for the publication of 6 high-definition national television, two additional inter-professional agreements were signed on 5 and 8 March 2012 between NRJ 12, CHERIE 25, SACD and certain production unions. In the scenario that CHERIE 25 is awarded a licence to broadcast feely via DTT, these agreements define the rates and amounts of CHERIE 25's commitments in relation to the support and development of the production of audiovisual works. Under these agreements, NRJ 12 undertook to align a certain number of its commitments with those of CHERIE 25. Under certain conditions and to a certain extent, these agreements provide for the sharing of obligations and rights by the two channels, as part of a group agreement. Pursuant to the provisions of the Decree dated 2 July 2010 and the above mentioned agreements which came into force due to the licence being obtained to transmit CHERIE 25, NRJ 12 is obliged: (i) since 2011, to allocate 3.2% of its annual net revenues for the previous year to the development of European cinematographic works, and 2.5%, also since 2011, to the production of original French cinematographic works, of which at least three quarters must be allocated to independent works, etc. (ii) to allocate 14.5% in 2012 and 15% from 2013 of its annual net revenues for the previous year to the development of original French works, of which 8.5% must be allocated to the development of public works as of In accordance with the provisions of the Decree dated 2 July 2010, the above mentioned agreements and the agreement signed with the Conseil Supérieur de l Audiovisuel, CHERIE 25 is obliged: (i) to allocate 15% from 2013 of its annual net revenues for the previous year to the development of original French audiovisual works, of which 8.5% to the development of public works, (ii) to allocate at a minimum a total of EUR 12 million to the development of audiovisual works for the financial years 2013 to 2015, of which EUR 6 million to the development of public audiovisual works. Likewise, NRJ PARIS is obliged to devote 20% of the total volume of its airtime to programmes of local interest broadcast for the first time. NRJ HITS, as a music channel, devotes most of its music programming to music videos. Charter aiming to promote diet and physical activity favourable to health in the programmes and advertisements broadcast on television In February 2009, under the aegis of the Ministry of Health and Sports and the Ministry of culture and Communication, the television channels, including NRJ 12, audiovisual producers and advertisers, signed a charter for a period of five years aiming to promote diet and physical activity favourable to health in programmes and advertisements broadcast on television, with the aim of contributing to preventing unbalanced nutritional behaviour among the youngest viewers. According to the terms of this charter, which the Conseil Supérieur de l'audiovisuel is responsible for implementing, the television channels undertake to: grant preferential prices to the "national institute for prevention and education in health" (French acronym INPES) for broadcasting collective campaigns to promote its health messages, broadcast programmes on food and physical activity and make them available to young viewers. On 25 June 2010, the Conseil Supérieur de l Audiovisuel presented the review of the first year of the Charter's application to the French Health Minister. The Council highlighted that the Charter's guidelines had been applied in full, although research still needed to be carried out in 2011 concerning the impact of the Charter's provisions on obesity in France. On 14 June 2011, the Council adopted its second report on the application of the charter. This report shows that the television channels are even more involved because the annual volume of transmissions relative to a healthy lifestyle and making reference to the website mangerbouger.fr has significantly increased RISKS RELATED TO INTELLEC- TUAL PROPERTY RIGHTS The Group holds intellectual property rights, including brands, marks, logos and domain names, which it uses in connection with its activities. In this context, it has put in place a system to monitor and defend its rights, but cannot be certain that the measures undertaken to protect its intellectual property rights will be effective or that third parties will not be able to infringe on, misappropriate or cancel its intellectual property rights. Given the importance of the recognition of the Group's various brands, any such infringement or misappropriation could adversely affect the Group's business, earnings, financial position and ability to achieve its objectives. However, the Group's intellectual property rights have not been subject to any such infringement to date RISKS RELATED TO THE CON- TENT PUBLISHER STATUS For the content of its radio or audiovisual programs, as well as the content, information and adverts published on its internet sites, whether they are produced in-house or supplied by third parties, the Group, as the publisher, is subject to the provisions of the French law of 29 July 1881 concerning the freedom of the press, and could be held liable as a publisher for the content published if it proves to be misleading, unlawful or illegal. 59

61 The Group is also subject to the legislation applicable in terms of image rights and privacy protection, as well as intellectual property rights, copyright and related rights. The Group seeks to ensure compliance with all such legislative and regulatory provisions, but no arrangements can make it possible to rule out any risk of demands or petitions being made. Such actions could have an adverse impact on the Group's business, financial position, earnings or outlook. Nevertheless, the Group has not faced any significant challenges in its capacity as a content publisher to date RISKS RELATED TO LEGAL DIS- PUTES, JUDICIAL PROCEDURES AND ARBITRATION The Group's main legal disputes, where relevant, are described in note 10 to the consolidated financial statements, and in note 26 to the annual financial statements. Also, in the normal course of its business, the Group is subject to tax and administrative inspections. It constitutes a provision each time a risk is determined and a cost estimate related to this risk is possible. Apart from what is mentioned above, there is no other governmental, legal or arbitration procedure, or any procedure of which the Company is aware, which is unresolved or outstanding, which might have, or has had over the last twelve months, a significant effect on the financial situation or profitability of the Company and the Group. 3.5 FINANCIAL RISKS See Chapter 7 - Note 27 of the notes to the consolidated financial statements. The Company has carried out a specific review of its liquidity risk and considers that it is able to cope with forthcoming instalments. 3.6 INSURANCE AND COVERAGE OF THE GROUP'S RISKS The Group takes out insurance policies to cover certain risks inherent in its business. The policies implemented cover the risks concerning human resources and managers, property and technical assets, brand image, any operating losses and any financial penalties applied in cases when the Group's liability is implicated. The Group's main insurance policies are as follows: PROPERTY DAMAGE INSURANCE CIVIL LIABILITY INSURANCE This policy covers the consequences of the implication of the civil liability of NRJ GROUP and its existing or future French subsidiaries. Coverage is acquired for damage caused to third parties by the Group and its subsidiaries within the framework of its activities and particularly its activities in radio stations, web radios, television channels, communication, consulting and organisation of events. Maximum coverage of EUR 20 million (all types of damage per claim), Excess charge variable from EUR 0 to 15,000 according to the nature of the claims CIVIL LIABILITY FOR CORPORATE OFFICERS The policyholders are the de jure and de facto directors of all the companies directly or indirectly held by NRJ GROUP. The main purpose of this insurance is to pay the costs of appearance, defence and any financial consequences stemming from any claim covering the personal responsibility of a policyholder due to any wrongdoing committed in their capacity as a director. This insurance also covers the Group's employees if their responsibility is implicated together with that of a director. Additional insurance cover has also been purchased to protect the companies of the Group against risks that may result from claims related to employment (harassment, discrimination and unfair dismissal), fraud and malevolence, and certain forms of threats against its own interests. The Group has not purchased insurance covering the risks of illness, resignation or death of its key men and women OTHER INSURANCE IN FRANCE Also, as well as provident insurance, the Group insures its employees during their professional travel and insures technical employees when they work on audio equipment, on towercast SAS' broadcasting equipment and during preparation for event-marketing operations. Other insurance programmes covering lesser risks are also in force, such as the Equipment All Risks policy covering mobile audiovisual equipment, and the policy covering the Group's vehicle fleet. The Group does not have a captive insurance company. The Group has taken out an insurance policy covering all damage caused to the Group's assets, as well as the operating loss consecutive to this damage. Maximum coverage of EUR 120 million, Excess charge variable from EUR 3,000 to 50,000 according to the nature of the damage. 60

62 3.6.5 INSURANCE OF INTERNATIONAL SUBSIDIARIES Concerning the international subsidiaries, these are autonomous in the management of their insurance policies, with the exception of the Belgian subsidiaries. In each country where the Group is established with subsidiaries and a local presence, property-damage insurance and public liability insurance is in force. The guarantee limits are as follows: In currency thousands* Property damage Public liability Finland (EUR) 3,000 1,000 Finland ** (EUR) 2,750 2,500 Norway (NOK) na*** 10,000 Sweden (SEK) na*** 10,000 Germany (EUR) 1,561 5,000 Switzerland (CHF) 230 3,000 Austria (EUR) 1, *the exchange rates for the euro against the currency on 31 December 2012 were as follows: CHF: / NOK: / SEK: ** insurance taken out by TELEMAST, broadcasting subsidiary in Finland ***insurance paid for by the partner 61

63 4 CORPORATE SOCIAL RESPONSIBILITY As a major media player in France, NRJ GROUP is aware of the influence it has over its stakeholders and society as a whole. As a result of this influence it bears a particular responsibility, one the one hand through its radio and television programmes which are a mirror but also guide social trends, and on the other hand through its exemplary management of its activities and transparency regarding its environmental and social impact. This year, for the first time the Group is allocating a chapter of this report to Corporate Social Responsibility (CSR). While it is legally obliged to do so pursuant to Article 225 of the Grenelle II law which was published in April 2012 and which requires that listed companies certify and publish their extra-financial data, the Group was eager to take advantage of the exercise to make progress in its reporting procedures and to implement good practices. Since the Group's activity is primarily of an intangible and cultural nature, the societal impact is a key factor for it and is therefore one of the main objectives of the report. In fact, the Group can use its media to express and disseminate its values to a broad public. Consideration of cultural diversity is a very important statistic for the Group in terms of both audiovisual content and the public to whom it is addressed. This reflects a recognised groupwide commitment to equality and to a better representation of women in the media. Moreover, the Group's employees ensure that progress is made on a daily basis and are the motivation behind the implementation of a responsible social policy. The Group's ambition is to make ethics a central aspect of its human resources management, and to foster the loyalty of its talented employees and give them the opportunity to progress in a professional environment that is motivating and rewarding, and which listens to individuals. Here also the Group strongly promotes equality between men and women, at all levels of the company. Finally, while the Group's activity has by nature a limited environmental impact, it is nevertheless still essential to make progress in the measurement and management of this indicator. NRJ GROUP wants to improve its day-today operations in order to better preserve the planet, whether this involves water and energy consumption or waste management. The Group also keeps a close eye on the broadcasting activity of its subsidiary towercast SAS and is committed to complying fully with the regulations governing magnetic waves, the integration of channels locally and dialogue with locals. This CSR chapter therefore is a first step, which highlights the work already being done by the Group and its scope for progress. 4.1 THE GROUP AND ITS STAKE- HOLDERS NRJ GROUP bases the development of its activities on a set of values and ethical principles to which the managers and employees refer and must comply with in all circumstances. Due to its status as a company whose shares are admitted for trading on a regulated market, NRJ GROUP is also anxious to comply with the rules of good governance applicable to listed companies. The Group's responsibility is also reflected in the different ways that it interacts with society: the public, firstly, which is directly affected by the programmes and messages broadcast on radio and television channels, but also the regulatory authorities which have a significant influence on content by setting a certain number of ethical rules. To maintain constructive dialogue on major societal issues, NRJ GROUP works to maintain as much as possible a relationship of trust, transparency and balance with all of its stakeholders. Its voluntary activities with associations and with the regional public are a concrete example of this commitment CORPORATE GOVERNANCE AND INTERNAL STANDARDS The Chairman's report on corporate governance, which is included in Article 5.4 of this registration document, provides an overview of the Group's corporate governance. Some of the points mentioned below warrant emphasis because they highlight the stress laid by the Group on respect for fundamental values and principles. Board of directors Since it changed its mode of governance (adoption of a Board of Directors in 2008), the Group has complied with gender equality on its Board of Directors, since it comprises three men and three women. The principle of equal representation of men and women is therefore complied with, and even goes beyond the minimum requirement. Moreover, in accordance with the AFEP/MEDEF code, one third of the members of the Board of Directors are independent. Independence criteria are reviewed every year by the Board, and the Board's internal regulations include rules for managing conflicts of interest, which go as far as the resignation of a director in certain cases. Finally, the Group naturally has an Appointment and Remuneration Committee and an Audit Committee. Internal standards The Group's ethics charter is its frame of reference in this regard. It formalises the fundamental values and ethical principles to which the managers and employees must refer and comply with in all circumstances. Applied within the Group since 2007, the ethics charter was last revised on 17 December Respect for the person, rigour, economic performance, the search for excellence, trust, fairness, honesty, transparency and integrity are the essential values of NRJ Group, with which each person within the Group must comply. These values are reflected in the professional principles and individual behaviour. With regard to the ethics charter, the independent directors act as compliance officers and are responsible for dealing with any matters involving a conflict of interest among the Group's employees. 62

64 Moreover, a report on the prevention of breaches and insider trading reminds the Group's employees of their legal and regulatory duties in the area of buying and selling NRJ GROUP shares, and presents the legal obligations of Group employees exposed to privileged information EXTERNAL STAKEHOLDERS The table below presents the Group's main external stakeholders* and summarises their role and objectives and their methods of exchanging information. Stakeholders Role/Objectives Basis of exchange Regulatory bodies (CSA, ARPP, ANFR, ARCEP) The regulatory bodies define the regulatory framework governing the Group's activity. Agreements or other documents signed with these bodies have a significant impact on its activity. Signature of agreements and charters; agreed information procedures conducted periodically or on an ad hoc basis at the request of the CSA Public Advertisers Suppliers and service providers Associations The listeners and viewers are the Group's public. They are directly impacted by the choice of programmes and messages broadcast. Advertising constitutes most of the Group's revenues. The choice of advertiser and of advertisements broadcast has an influence on the public's behaviour. The Group's activity requires a lot of buying, including of services related to programmes (e.g.animation). Anchored regionally, and present nationally and internationally, the Group works with associations in sharing its values and supporting certain social causes. Opportunities to talk during programmes, individual responses to s, channel websites, meetings on the ground, tours Exchanges; meetings Ethical charter and purchasing directive Ad hoc action, intervention via audiovisual programmes * the internal stakeholders (employees, shareholders, etc.) are mentioned in other sections of the registration document COMPLIANCE WITH THE OBLIGA- TIONS AND RECOMMENDATIONS OF THE CSA As a publisher of audiovisual content, the Group operates in a highly structured regulatory environment. Each radio and television department has signed an agreement with the Conseil Supérieur de l Audiovisuel (CSA). The Group oversees strict compliance with all of the general and ethical obligations of its radio and television agreements, notably: ensuring plurality of expression of thought and opinion, favouring diversity, ensuring there is no infringement of a person's dignity, ensuring protection of children and adolescents, ensuring that programmes are accessible to people who are deaf or with hearing difficulties, broadcasting a significant quota of European and original French works. With regard to the Group's television channels: An ethics and viewing committee controls programmes that have been acquired or pre-recorded to ensure they comply with the CSA's obligations and draws up appropriate classification and programming recommendations. It comprises the channel director, the information director, the procurement director, the person responsible for managing the channel and programming, and three people external to the channel. Where the Group's radio channels are concerned, prerecorded content is listened to in advance by the channel's managers. The annual report on the terms of execution of the obligations and commitments of each television and radio department is submitted to the CSA from March of each year. The highlights and data presented below relate to DIVERSITY OF ORIGIN ON RADIO AND TELEVISION NRJ GROUP strongly and regularly promotes the principle of diversity of origin and cultures of the national community. This is expressed in several ways: through programme themes and reports, programme anchors and presenters, fictional actors, participants and speakers in magazine and entertainment shows, and the public invited to attend television and radio programmes. Significant results were obtained in 2011: 31% of NRJ HITS' programmes directly represent "visible minorities", 32% of NRJ 12's presenters are considered as representative of cultural diversity, The magazine show that is most watched on NRJ 12, "Tellement Vrai" promotes diversity in the majority of its programmes. The channel has undertaken to make all of its employees aware of this issue through the circulation of a thematic report and a plenary meeting on the subject, 63

65 On NRJ PARIS, 30% of the "Paris C est Fou" programmes have invited participants that are representative of France's diverse society (by origin and socio-professional category). In 2012, all of the Group's channels complied with their obligations and with the CSA's recommendations by respecting the classification of programmes and applying the corresponding labels, as formally established ACCES OF PROGRAMMES TO PEOPLE WHO ARE DEAF AND WITH HEARING DIFFI- CULTIES The Group's channels voluntarily signed riders to agreements made with the CSA to increase their level of requirements in terms of accessibility of their programmes to people who are deaf or hard of hearing : The rate of subtitled programmes on NRJ PARIS reached 16.5% of the total volume, which is three times above the contractual requirement, For NRJ 12, the volume of programmes broadcast with the option of subtitles reached 30% of the total broadcast volume in 2011, which is in line with its contractual requirements (rider dated 25 February 2010), To go even further than this, NRJ 12 broadcast its first ever film with audio description in December This involves an additional commentary that provides a description for people who are blind or partially sighted. To further enhance this approach, CHERIE 25 set itself an annual target of broadcasting twelve audio-description programmes by BROADCASTING FRENCH-BASED AU- DIOVISUAL/MUSICAL PROGRAMMES In accordance with their agreement with the CSA, the Group's television departments must reserve at least 60% of the total time that they dedicate annually to the broadcast and repeat broadcast of audiovisual and cinematographic works, to the broadcast of European works and 40% to the broadcast of original French works (EOF). Main results in 2011: Television channels Annual hourly volume Of which European works Of which original French works NRJ PARIS 3, % 74.0% NRJ 12 8, % 53.6% NRJ HITS 8, % 42.5% The Group's radio departments must also comply, in accordance with Article 3-2 of the agreement signed with the CSA, with the provisions related to the broadcasting of French songs. None of the Group's channels were sanctioned by the CSA with regard to PROTECTION OF CHILDREN AND ADO- LESCENTS Adolescents account for a significant share of the public that listen to and watch the Group's channels. Appropriate mechanisms have been in place for several years to guarantee the protection of this sensitive category. An editing studio makes the necessary, prudent cuts to programmes that are considered "litigious" by the ethics and viewing committee. The CSA's campaign to raise the public's awareness of the measures to protect children and adolescents on television was heavily supported by the Group, which broadcast it 131 times between November and December RELATIONS WITH LISTENERS AND VIEWERS RAISING AWARENESS THROUGH PRO- GRAMMES The Group's channels and radio stations are not intrinsically designed to present information. Nevertheless, within certain programmes and reports, the Group made an effort to share its vision and raise the public's awareness of societal issues, notably gender equality and equality for handicapped people, going over and above the obligations set by the CSA. Gender equality For several years, NRJ GROUP has been a solid promoter of fair representation for women in the media. This is reflected across the Group, in its human resources but also in its programmes and action among the public: NRJ GROUP fervently sought and in the end obtained a free DTT channel primarily aimed at a female public, i.e. CHERIE 25. From its introduction, the channel has sought to present exceptional women, both well-known and anonymous. It has highlighted societal subjects that are important for women, both impertinently and with humour. Moreover, note that the editorial committee and the management of CHERIE 25's programmes are 100% overseen by women; For CHERIE 25, Chekeba HACHEMI, President of the association "Afghanistan libre" and a militant supporter of the women's cause, participated in a series of documentaries in which she meets women from around the world (Tunisia, Canada, India). In 2012, NRJ GROUP deliberately participated in a commission on the portrayal of women in the media. After several months of counting, the report highlights the number of women experts presented on each of the Group's channels and stations. Despite very different editorials, requiring varying levels of intervention by experts, the results are very positive and fluctuate at around 50% (40% for RIRE & CHANSONS, 53% for NOSTALGIE, 52% for CHERIE FM). NRJ 12 and NRJ PARIS stand out with 75% of experts. Moreover, in the contracts with programme producers, NRJ GROUP can demand gender equality during the approval of the profiles of speakers that appear on the Group's channels. 64

66 Finally, the Group participates in partnerships that aim to promote women: CHERIE FM partnered the "Rallye des Princesses" and "Rallye des Gazelles", and along with NRJ PARIS partnered the Trofemina, an event that awards talented and innovative women who have shown particular success in their business. Disabled people The magazine television show "Tellement Vrai" broadcast on NRJ 12 presents particularly topical subjects and life stories. It primarily covers all forms of diversity and cases of discrimination against disabled people: Down's Syndrome, paralysis, rare genetic diseases (Cutis Laxa), paraplegia, mental handicap, autism, etc. In presenting women and men with such disabilities, the channel takes a positive approach, favouring understanding and an attitude of normality on the part of the public PROMOTION OF PHYSICAL ACTIVITY AND HEALTHY EATING HABITS Aware of the role it can play in preventing unbalanced nutritional behaviour, in 2009 the Group along with other audiovisual producers and advertisers, signed a "food charter" proposed by the CSA, and designed to promote healthy physical activity and eating habits in the programmes and advertisements broadcast on television. Under the terms of this charter, which the CSA is responsible for implementing, the television channels undertake to: grant preferential prices to the "national institute for prevention and education in health" (French acronym INPES) for broadcasting collective campaigns to promote its health messages, broadcast programmes on food and physical activity and make them available to young viewers. On NRJ 12, NRJ HITS and NRJ PARIS, this led in 2012 to the broadcasting of programmes designed to raise the public's awareness: "Et toi, tu manges quoi?"; "Trop la pêche"; "Une famille au Top" and several thematic episodes of "Tellement Vrai", including "Mon alimentation est un problème". All of these programmes represent a total of around 125 hours on the subject of food ON THE GROUND AND IN THE REGIONS Because they broadcast throughout France, the Group's stations and channels enjoy good visibility and they develop initiatives to foster closer relations with the public. Regional programmes: Three of the Group's radio stations offer local content in more than 60 cities in France, which means the content can be adapted to suit the specific local preferences of each region. Every day, several hours of programmes adapted by region are broadcast, contributing to the promotion of local cultural identity. Action on the ground: Throughout 2012, different activities were conducted on the ground, including: She Can DJ From June 2012, NRJ ran a free competition, with no obligation to purchase, entitled "SHE CAN DJ" with the aim of finding and presenting the best female DJs in France. The winner was offered a contract at Music France, n 1 in the world in Dance Music, and an opp ortunity as the resident DJ of a national radio station on which she can broadcast one of her samples. In this way, NRJ contributed positively to the professional integration of people in difficulty, while demonstrating its on-theground approach. NRJ@School NRJ launched the NRJ@School project several years ago. Initially the aim was to detect and train future presenters by giving them the opportunity to enrol in a sandwich course given by NRJ School and the INA, and to graduate with a diploma. It has since evolved and now gives students (secondary and high school pupils) the opportunity to create a group via NRJ's official Facebook page and to call a maximum of friends to join them and win the opportunity to meet a well-known artist. Each operation lasts around 20 days and involves more than 60,000 participants throughout France. The Group and the artists concerned get to meet the public, notably in key areas. NRJ Music Tour The NRJ Music Tour is a series of free open-air concerts organised regionally by NRJ. A variety of artists, including international musicians and French chanson singers perform, and the event given the Group an opportunity to meet its listeners and its regional public in general RELATIONS WITH ADVERTISERS The duration of advertising time of the different channels is governed by agreements signed with the CSA and the content is managed by the advertisers which purchase advertising space for their campaigns from the Group. Although the Group is not directly involved in the creation of advertising content, it operates an internal validation system to ensure that the messages being transmitted are in line with its values and with the regulations. Television advertisements are then submitted to the French advertising regulatory authority, ARPP (Autorité de Régulation Professionnelle de la Publicité) for definitive approval, which is why the Group maintains direct contact with this body. The Group moreover takes advantage of its visibility in the media to promote its social and citizen-based values among its listeners and viewers. This is reflected in its campaigns in support of well-known public utility campaigns. In 2012, this free advertising space offered visibility for the action and initiatives of many associations and foundations, including Action contre la faim, les Restos du Cœur, la Croix Rouge Française, Solidarité Sida, SOS Village d Enfants, UNICEF France, etc. A total of almost 100 associations benefited from the Group's support last year. 65

67 4.1.6 RELATIONS WITH SUPPLIERS The Group's relations with its suppliers are governed by internal framework documents: the Group purchasing directive and ethics charter. These two documents reflect the values and ethical principles that the managers and employees comply with in all of their purchasing activities and in their relations with suppliers. While the Group does not include specific social or environmental requirements in its choice of supplier, it nevertheless is careful to assess their services equally in terms of price and quality. ATF Gaia NRJ GROUP selected ATF Gaïa to oversee the reutilisation and recycling of its IT and electronic equipment. Eighty per cent of ATF Gaïa 's workforce are disabled people, and for ten years it has been working in partnership with the Nanteau professional rehabilitation centre (Centre de Réadaptation Professionnelle et Fonctionnelle de Nanteau") which works with the local authorities in Seine-et-Marne on an innovative project to improve access to employment for disabled people (suitable transport and housing). Through this association with ATF Gaïa, the Group contributes to the integration of disabled workers. Overview of the partnership: CHARACTERISTICS Reversals EUR185 EUR 23,979 Pick-ups 1 for 389 kg 21 for 11 T Services EUR 13,446 EUR 0 Subcontracting When it looks to external companies to provide certain services, the Group requires each of its service-providers, through obligations fixed in their contracts, to respect all legal and regulatory measures in force (particularly concerning environmental and employment matters). NRJ GROUP also keeps an eye on the social commitments of its producers, and notably their compliance with the obligations stipulated on the agreements signed with the CSA. Producers undertake to respect human beings, equality between men and women, the protection of children and adolescents, to prohibit insulting, filthy, defamatory, violent, racist and pornographic sentiment, and any breach that constitutes an infringement of human dignity SPONSORSHIP NRJ GROUP has been involved for many years in major campaigns in society as part of its support for associations. This is reflected in its different media activities, but also through the direct involvement of its employees in voluntary work THE FOUNDATION'S WORK The Group supports the NRJ Foundation, which was created in 1999 by Jean-Paul BAUDECROUX, through an annual financial contribution paid by NRJ MUSIC SARL based on a percentage of the sales of NRJ MUSIC AWARDS compilations. The purpose of the NRJ Foundation is to advance medical research in neuroscience. Each year, the Foundation presents a major scientific prize of EUR 100,000 in recognition of and to encourage scientific work carried out by an individual or group of persons, within a public or private institution. In addition to this annual prize, the NRJ Foundation awards three subsidies of EUR 40,000 to young French teams every year. Since its creation thirteen years ago, the NRJ Foundation has awarded more than EUR 4 million in subsidies to more than 80 researchers, professors, doctors, heads of research in neuroscience and their teams working in areas as varied as memory, multiple sclerosis, eye pathologies, depression in young people, epilepsy in children, and neuronal stem cells. In 2012, Isabelle ARNULF received the scientific award for her research on behavioural problems during REM sleep, along with Medhi TAFTI, professor at the University of Lausanne Centre for Integrative Genomics, received a subsidy. The 2013 Scientific Prize will go towards the theme of "genetics of neurodegenerative diseases" and the subsidies will be awarded to young French teams working on the treatment of cerebral vascular disease COMMITTMENTS MADE TO ASSOCIA- TIONS During 2012, the following initiatives were pursued: Sidaction In addition to the initiatives led by the its television channels, NRJ GROUP worked with Sidaction during a day of mobilisation during the working hours of the employees of UES Boileau. This day, which was initiated in 2011, was repeated on 30 March 2012, and provided the Group's employees with an opportunity to offer support to the voluntary workers of Sidaction during their organised AIDS prevention initiative. Institut Curie As part of the national "Octobre Rose" initiative to raise awareness of the work being done to combat breast cancer, the Group provided assistance to the Institut Curie's "des femmes donnent aux femmes" (women giving to women" initiative. The Disque d Or donated by NRJ was one of many donations for auction by AUDAP & MIRA- BAUD and by Drouot. The funds collected as part of this auction were paid to the Curie Institute, a well-known French public foundation and France's leading cancer research centre. They will be used to finance major disease research programmes. Flamme Marie-Claire In 2012, the Group was again the exclusive radio partner (CHERIE FM) for the "La Flamme Marie-Claire" initiative which took place from 12 May to 30 June Funds from the sale of La Flamme Marie-Claire candles were allocated to help finance programmes to support the education of young girls worldwide and to help finance education in France. All of the funds from the sale of the candles were paid to Toutes à l Ecole, La Chaîne de l espoir and AFEV (Association de la Fondation Etudiante pour la Ville). Pasteurdon 66

68 As part of an ethical and humanist approach, NRJ 12 and NRJ PARIS worked alongside the Institut Pasteur in support of the Pasteurdon initiative. By broadcasting short programmes explaining the research work carried out by the Institut Pasteur (autism, Alzheimer's disease, stomach cancer, emerging diseases, human genetics, diarrhoea in children in developing countries, etc.) NRJ 12 and NRJ PARIS helped to spread the word about the research conducted at the Institut Pasteur and to prevent infectious diseases. 4.2 EMPLOYEES The employees are the keystone to the Group's success. For this reason, the Human Resources Division promotes employee fulfilment in all areas of their professional life saw the signature of a three-year jobs and skills management (GPEC) agreement within the Boileau employment unit, underpinning notably the training programme and initiatives favouring senior workers. Gender equality remains the spearhead of the Group's HR policy. An agreement on professional equality between men and women was signed for each of the two employment units and a commission was established to monitor the issue. Finally, employee savings were a key subject of negotiation in 2012 with the signature of a new profit sharing agreement applicable to the two employment units, the implementation of a savings plan, also applicable to the two employment units, and the signature of an agreement covering bonuses within the Boileau employment unit. These agreements lent further weight to the Group's corporate social responsibility, increasing its capacity to attract more talents and to retain those who contribute every day to the Group's performances. The information below concerns the Group's activities in France only, except where otherwise specified HEADCOUNT AND EMPLOYMENT TOTAL HEADCOUNT BY GEOGRAPH- ICAL AREA At 31 December 2012, the Group had 1,784 members of staff. TOTAL HEADCOUNT* FRANCE INTERNATIONAL (Germany, Austria, Belgium, Switzerland, Sweden, Norway and Finland) 1,784 1, * this headcount does not include media industry workers on short-term contracts The Group has 1,448 members of staff in France, split between the Boileau and Régions employment units, with 800 and 648 employees respectively. The Régions employment unit, via the broadcasting sites and local stations, participate actively in job creation throughout France BREAKDOWN OF EMPLOYEES BY AC- TIVITY AND SOCIO-PROFESSIONAL CATEGO- RY ACTIVITIES Advertising departments Radio stations Administrative and financial support functions Broadcasting Television stations Internet Total 1,448* 1,425 * this headcount does not include media industry workers on short-term contracts The Group's total headcount in France rose by 1.6% between 2011 and 2012 despite the negative economic environment. The main changes involved: The recruitment of 242 employees under open-ended contracts. The recruitment of 50 employees under fixed-term contracts. The lay-off of 39 employees. As in 2011, the Group continues to benefit from its popularity and strong brand image and can guarantee quality stable employment (mainly management level employees under open-ended contracts). BREAKDOWN OF THE HEADCOUNT BY SOCIO- PROFESSIONAL CATE- GORY MANAGERS EMPLOYEES SKILLED WORKERS Total 1,448 1, ORGANISATION OF WORK AND AB- SENTEEISM OVERTIME The total number of hours of overtime paid in 2012 was 3, ORGANISATION OF WORKING TIME General organisation Since 1 January 2001, the Group has been applying two agreements on the adaptation and reduction of working time, one of which is specific to the Boileau employment unit and the other to the Régions employment unit. This last agreement was modified by an amendment signed on 12 November

69 The working time of employees of the Group is organised as follows: The personnel, who are not subject to a flat-rate pay agreement covering days worked, in theory work 39 hours per week and have 22 additional days off per year under the French reduced working time legislation (RTT). However, specific terms for the adaptation of working time covering certain categories of employees have been implemented due to particular constraints related to their activities. As an example, journalists work 37 hours per week and have 11 days of RTT per year. Those personnel subject to a flat-rate pay agreement covering days worked work 217 days per year and have an average of 11 days of rest per year. Senior executives are not subject to the legal and agreed measures concerning working time, in accordance with the regulations in force. They receive a package of 5 additional days of rest per year. Duration of working time In the great majority of cases, the Group, which desires to maintain balance between professional and family life, agrees to requests made by employees who wish to work part-time. On 31 December 2012, 114 employees were occupied part-time, including 85 women and 29 men ABSENTEEISM AND RELATED REA- SONS REASONS Number of days of absence for illness Number of days of absence for maternity or paternity Number of days of absence for exceptional leave Number of days of non-paid absence Number of days of absence for work-related or travel-related accidents 9,343 11,402 6,207 6,969 1,064 1,211 1, Total number of days of absence 18,385 20, REMUNERATION REMUNERATION AND PAY INCREASES The Group's remuneration policy forms part of an overall approach that aims to reconcile the following parameters: development of current employees' remuneration and measures to ensure their loyalty, attracting new talent, the intention to encourage internal mobility, the necessary control of payroll expenditure. A Human Resources Committee, composed of the Deputy General Manager, the Executive Director Finance and International Activities and the Human Resources Director, meets each week and works with managers to achieve these objectives. Pay increases and the payment of exceptional bonuses are based on individual performance and the recognition of merit. Variable remuneration is determined in the light of the collective and/or individual results of employees. The criteria for allocation are qualitative and/or quantitative and are contractually defined SOCIAL SECURITY CHARGES Social-security charges (in euros) Employee's contributions 12,536,701 12,357,842 Employer's contributions 28,888,891 29,085,220 Total 41,425,592 41,443, PROFIT-SHARING, INCENTIVE PLANS AND EMPLOYEE SAVINGS PLAN A share in the Group's profit has been paid since 1994 in accordance with the profit-sharing agreement in force. The amount of the special profit-sharing reserve is determined in accordance with the legal formula. The amount of the special profit-sharing reserve in 2012 was EUR 4,236 K. An employee savings plan was established in December 2012 for an indefinite duration, among the companies that make up the Boileau and Régions employment units. An incentive plan was signed in June 2012 for a term of three years for the employees of the Boileau employment unit OPTIONS GRANTED TO THE EMPLOYEES Three share-option plans were implemented by the Board of Directors in accordance with the authorisation granted by the General Meeting of 27 June Two plans were introduced following a decision by the Board of Directors on 15 September 2008 (Plans No.1 and No.2) and a further plan was implemented following a decision by the Board of Directors on 14 September 2009 (Plan No.3). Plan No. 1 became null and void during 2009 following the sole beneficiary's departure from the Group. 68

70 History of stock options granted Information on stock option plans Plan No. 2 Plan No. 3 Date of Annual General Meeting 27 June June 2008 Date of Board of Directors meeting 15 September September 2009 Total number of shares initially granted: (i) o/w number of shares which may be purchased by: - corporate officers (Maryam SALEHI, director) - Top ten employee recipients (ii) o/w number awarded - with no performance conditions - with performance conditions 906, , , , , , ,000 80, ,000 Starting date for exercising options: - Options with no performance conditions - Options with performance conditions 16/09/2012 After a period of 20 trading days following publication of the 2011 results, i.e. 17 April 2012 Expiry date Two years from the starting date for Two years from the starting date for exercising options exercising options Initial exercise price Exercise price at 31 December 2012 (i) Exercise terms - with no performance conditions - with performance conditions 303,000 options exercisable from the starting date of the exercise period 603,000 options that may be exercised if the performance conditions for 2009, 2010 and 2011 current EBIT are met (ii) 80,000 options exercisable from the starting date of the exercise period 120,000 options that may be exercised if the performance conditions for 2009, 2010 and 2011 current EBIT are met (iii) Number of shares purchased Nil Nil Total number of share purchase options cancelled or declared null and void 24,000 Nil Stock options outstanding at year-start: 882, ,000 Adjustment pursuant to Article R of the French Commercial Code 113,437 25,721 Share options remaining at the end of the exercise period 995, ,721 Of which: - with no performance conditions - with performance conditions 341, ,463 90, ,432 Value of shares used as a basis for the social contribution tax of 1% (i) Exercise price at 31 December 2012 A dividend payment drawn from the 'issue premium' account was made in May The exercise price for shares that may be purchased under these two plans has been reduced from 7.71 (exercise price at 31 December 2011) to Note that the two previous exceptional dividends paid in May 2010 and May 2011 reduced the exercise price respectively from: to 7.99, - and 7.99 to (ii) Plan n 2:performance conditions - 201,000 options exercisable if the current Ebit in 2009 is = or > the budgeted 2009 current Ebit, - 201,000 options exercisable if the current Ebit for 2010 is = or > the budgeted 2010 current Ebit, - 201,000 options exercisable if the current Ebit for 2011 is = or > the budgeted 2011 current Ebit. Giving a total of 603,000 exercisable options. The performance conditions related to plan n 2, as indicated above, have all been met. (iii) Plan n 3: performance conditions - 40,000 options exercisable if the current Ebit for 2009 is = or > the budgeted 2009 current Ebit, - 40,000 options exercisable if the current Ebit for 2010 is = or > the budgeted 2010 current Ebit, - 40,000 options exercisable if the current Ebit for 2011 is = or > the budgeted 2011 current Ebit. Giving a total of 120,000 exercisable options. The performance conditions related to plan n 3, as indicated above, have all been met. (iv) Options were made null and void following the departure of one of the Group's beneficiaries (options that had not been adjusted) 69

71 Information on stock option plans Options to subscribe to or purchase shares granted to the top ten employee recipients who are not corporate officers, and number of options exercised by these individuals Total number of options awarded/shares subscribed to or purchased Weighted average price Options granted during the financial year, by NRJ Group and by any company within the scope that is eligible to grant options, to the ten employees of NRJ Group, and any company included in this scope, for which the number of options granted is the highest (overall information) Options held on NRJ Group and companies mentioned above that were exercised during the financial year by the ten employees of NRJ Group and these companies, for which the number of options purchased or subscribed to is highest (overall information) COLLECTIVE RELATIONSHIPS PROFESSIONAL RELATIONSHIPS The Human Resources Department pays particular attention to the quality of employee/management dialogue within the Group. This requirement is expressed in particular through the organisation of numerous meetings with the personnel-representative institutions within the Boileau and Régions employment units during Moreover, 2012 saw the organisation of representative elections within the Régions employment unit. Employee representative bodies within the Régions and Boileau employment units (as at 31/12/2012): PROFESSIONAL RELATIONSHIPS Number of personnel delegates (incumbents) 17 Number of members within employeerepresentative committees (incumbents) 13 Number of members within Health, Safety and Working Conditions Committees (incumbents) 12 Number of trade-union delegates 6 Furthermore, in accordance with the regulations in force, the personnel-representative institutions in question are invited to each meeting of the Board of Directors and to all of the General Meetings. There is a diverse range of trade unions within the Group: FO, the CFDT, the CGT, the SNJ-FO, the SNRT-CGT, the CFE-CGC and the SNJ are the trade unions present within the Boileau and Régions employment units STATEMENT OF COLLECTIVE AGREE- MENTS 2012 was marked by the following actions with the labour relations partners: The establishment of an action plan covering heavy manual work, signed on 31 January by the Régions employment unit and on 21 September by the Boileau employment unit. The establishment of an action plan to maintain senior employees in employment, signed on 31 January by the Boileau employment unit. The negotiation and agreement of a collective company agreement formally establishing professional equality between women and men, signed on 30 January by the Boileau employment unit and on 31 January by the Régions employment unit. The negotiation and agreement of a collective company agreement covering the provisional management of jobs and skills, signed on 4 July by the Boileau employment unit. The negotiation and agreement of a collective company agreement covering employee bonus incentives, signed on 29 June by the Boileau employment unit. The negotiation and agreement of a collective company agreement covering the copyright of journalists, signed on 20 September by the Boileau employment unit. The negotiation and agreement of a collective company agreement related to the scope of the Boileau employment unit and its extension to include CHERIE HD, signed on 23 October by the Boileau employment unit. The negotiation and agreement of a consolidated profit-sharing agreement among the companies of the NRJ Group, signed on 6 December by the Boileau employment unit and on 7 December by the Régions employment unit. The negotiation and agreement of an employee savings plan among the Group companies, signed on 7 December by the Boileau and Régions employment units. The other company collective agreements and action plans in force during 2012 within the Group were as follows: Action plans Action plan to help maintain senior employees in employment within the Régions employment unit, signed on 27 December Memorandum of understanding on the reduction of working time Memorandum of understanding on the reduction of working time within the NRJ BOILEAU unit signed on 29 December Memorandum of understanding on the reduction of working time within the NRJ PROVINCE employment unit (since known as NRJ REGIONS employment unit) signed on 29 December 2000 and its amendment signed on 12 November Profit-sharing Agreement on employee profit-sharing in the results of the Group, signed on 27 May 1993 and its amendments. 70

72 Union resources Company agreement on resources granted to trade unions within the companies composing the NRJ GROUP Régions employment unit, signed on 14 November 2007 and its amendment signed on 10 December Night work Night work agreement signed on 9 July 2010 within the Régions employment unit and its amendment signed on 30 September Copyright Agreement relating to copyright for journalists signed on 30 September 2010 within the Régions employment unit EMPLOYEE-RELATED MEASURES The Group has implemented various social measures to improve, as far as possible, the well-being of its employees. In this respect, employees benefit from a system that coves healthcare costs, providing a good level of repayment for medical expenses. It should be noted that the Group finances half of the premiums for the basic plan. Also, by way of example, the Group maintains the remuneration of pregnant employees with at least one year of seniority throughout the entire period of their maternity leave HEALTH AND SAFETY Health and safety conditions within the Group are regularly monitored, particularly at meetings with the Health, Safety and Working Conditions Committees (HSWCC). In this regard, as a continuation and to strengthen the joint measures designed to improve working conditions, a plan concerning the prevention of heavy manual work was signed on 21 September 2012 for each of the Boileau employment unit companies. The plan, which has also been deployed by other media players, aims to develop short, medium and long term measures to reduce and where possible eliminate heavy manual tasks and physically and psychologically arduous situations. In fact, certain factors in this regard (manual handling, arduous postures, working at night, etc.) raise a risk regarding the health of the employees over the course of their career, which may give rise to illness, accident or wear-and-tear on the body. Following a diagnosis of all companies in the employment unit to determine the number of employees exposed to these risks, measures were proposed in September 2012 for a duration of three years. The defined indicators will be used by the specially created Commission to monitor the application of the plan over the next few years. Lastly, under the employer-sponsored housing-assistance programme, the Group's employees can benefit from reduced-rent housing. Furthermore, the Group offers its employees all measures under this arrangement Training NRJ Group is aware that employee training is an essential facilitator that contributes to its performance and long-term sustainability. For this reason, it lays stress on the acquisition, maintenance and development of knowledge, know-how and social skills. The indicators shown in the table below have been used for several years: TRAINING Amount devoted to training (in ) 1,444,870 1,373,655 % of payroll expenditure devoted to training 2.34% 2.23% Number of employees trained* 711, representing 50% of total staff 631, representing 44.3 % of total staff Number of training actions Number of hours of training 12,284 12,607 Number of employees benefiting from Individual Training Entitlement *each employee is only counted once, even if they receive several training courses To implement its training policy, the Human Resources Department provides IT tools, through its Internet site, to improve the management of training requirements (speed, simplicity, traceability, etc.). This policy is primarily built around training courses covering its professional specialisations, management and personal development saw the following activities: The launch at the Boileau employment unit of two training modules based on Process Com, a communication tool that enables better understanding of personalities, distributed by Kahler Communication France. One is aimed at the managers (Develop your leadership with Process Com) and includes two sessions of two days each, and the other one is aimed at the employees (Optimise your personal development with Process Com») which takes place over three days. This module is designed to help develop appropriate communication skills, react appropriately to you surroundings, and build constructive and effective short and long-term relationships. Feedback from the training was very positive. Stress-management training which was initiated in 2010 and continued in 2012, continued to be a big success. It is open to all employees on a voluntary basis. 71

73 The managers and sales teams also had training to boost their performance, notably in the development of their sales and managerial skills EQUALITY OF TREATMENT ACTION PROMOTING EQUALITY OF TREATMENT Aware that the diversity of its workforce constitutes a key attribute, the Group naturally respects the principle of professional equality between men and women, notably in terms of the make-up of its workforce. TOTAL HEADCOUNT France 2012 % 2011 % Men Women Total 1, , Breakdown of female employees according to Group activity: ACTIVITIES 2012 % Advertising departments % Radio stations 81 13% Administrative and financial support functions % Broadcasting 18 3% Television stations 32 5% Internet 13 2% Total % Significant measures were implemented in 2012 to underpin equality of treatment: In January 2012, the Group signed an agreement on the equal treatment of women and men within the two employment units. The aim of the agreement is to reduce professional inequality from the point of recruitment and throughout all stages of professional life. In signing this agreement, the Group's aim is to promote healthy attitudes to the principle of professional equality. A report was prepared for 2011 showing a comparison of the situation of women and men at each of the employment units. These reports were used to analyse the situation and were the basis on which the Group focused on three particular aspects: 1. Effective remuneration 2. Training 3. The relationship between the activity and family responsibility. Moreover, the principle of equal treatment is applied fully within the different Group activities and hierarchies: The television division comprises 50% women and 50% men. The Group's board of directors comprises six directors, three of whom are women ACTION FAVOURING DISABLED EMPLOYEES The Group complies with its legal obligations, particularly through the conclusion of service contracts between each of its subsidiaries and a sheltered employment institution. Among these institutions feature ESAT Henri Castille, ESAT l Interface Messidor, ESAT l Atelier Léon Fontaine and EA Handicap Services. Among the highlights in 2012 were: the renewal of the partnership with ATF Gaïa. This represents 0.71 beneficiary units which contribute to the Group's compliance with its quota; the launch at the end of 2012 of a Handicap diagnosis which will be deployed in This measure completes the voluntary training programme on the subject of handicapped employees held for staff representatives during the year. 72

74 ACTION FAVOURING SENIOR EMPLOYEES Breakdown of the headcount by age and by activity: Activity < 25 years 25 to 29 years 30 to 39 years 40 to 49 years 50 to 59 years 60 years and + Total Radio stations Broadcasting Internet Advertising departments Support functions Television stations Total ,448 Negotiations that began in 2011 gave rise to the implementation of specific plan for senior employees and the signature of a joint action plan within the two employment units. This action plan came into force in December 2011 for the Régions employment unit and at the end of January 2012 for the Boileau employment unit. Its aim is to maintain a specific rate of senior employees aged 55 and over at each unit and to implement measures that are favourable to the maintenance of senior employees in employment. The Group has three objectives in this regard: to anticipate career advancement, to develop skills, qualifications and access to training, to manage the final career years and the transition between activity and retirement. The progress of this plan at the two employment units was assessed at the end of November The results are as follows: ACTION PLAN FOR SENIOR EMPLOYEES Boileau employment unit Régions employment unit Indicators Objectives Indicators Objectives Maintain a rate of employees aged 55 and over similar to the previous year's rate within each employment unit For employees aged 45 and over: hold an annual feedback meeting with their manager as part of the annual appraisal process For employees aged 45 and over: send out a separate letter informing them of the content of the agreement and of existing training opportunities For employees less than two years from retirement: provide training on preparing for retirement 3.11% 2.98% 1.38% 0.65% 43% 80% 80% 80% 86% 95% 97% 80% 100% 80% 0% 80% 73

75 4.3 THE ENVIRONMENT Despite its small impact, the Group's media activity has an environmental responsibility to reduce its consumption of resources on the one hand (water, energy, paper, consumables, etc.) and direct and indirect pollution on the other (greenhouse gas emissions related to employee travel, waste, etc.). The Group therefore makes an effort to promote responsible attitudes internally, notably by encouraging energy saving and waste reduction. The transport and radio transmission activity overseen by towercast SAS is moreover subject to strict compliance with the regulations to ensure optimal environmental and social integration. That said, the Group is aware its action in this area is limited at present and that the measurement and consolidation of environmental data is necessary from 2013 if it is to make progress in its knowledge and management of this factor ENERGY CONSUMPTION Energy consumption is monitored by the Group's General Services Department. The table below summarises the consumption levels of the Parisian sites (Rue Boileau and Avenue Théophile Gautier), the regional advertising departments and towercast SAS's sites. Where data is available for a site, consumption for the same site in 2011 is specified. Finally, an estimate of the CO2 emissions associated with these consumption levels was conducted. Electricity consumption (kwh)* 2012 % 2011 % BOILEAU employment unit 5,179, ,205,644 - Rue Boileau 3,287, ,422, Avenue Théophile Gautier 1,892, ,783, REGIE NETWORKS 1,567, NC - TOWERCAST 12,639, NC - NRJ RESEAU 67, NC - Total 19,454, ,205, CO2 equivalent (in tonnes) 1, * annual consumption over 12 rolling months from 1 July 2011 to 30 June 2012 The electricity consumption of the Parisian sites varies little each year. The General Services Department wants to reduce these consumption levels by installing low energy bulbs in 2013 and automatic detectors in the bathrooms and corridors ELECTROMAGNETIC WAVES REGULATIONS CONCERNING ELEC- TROMAGNETIC FIELDS Cf Measurement of electromagnetic fields (Risk factors and insurance section) PROTECTION OF SITES AND EMPLOY- EES Cf Other measures for protecting sites and employees (Risk factors and insurance section) OTHER ENVIRONMENTAL MEASURES Given the Group's activity, water and paper consumption and waste volumes are not indicators followed by it in The Group's impact in these areas is not significant. Also, in 2012 the Group did not implement measurement tools for greenhouse gas emissions linked to vehicles and to employee travel. Certain other measures were nevertheless initiated or consolidated last year: the partnership with ATF Gaïa for the pick-up of waste electrical and electronic equipment (WEEE), i.e. 59 pick-ups in 2012; monitoring of the vehicle fleet for the entire Group and its wish to start looking to greener vehicles; the revival of selective sorting with service provider Elise; the implementation of sparklers and compartments in toilet flushes to reduce water consumption. These different measures and procedures are to be extended in Finally, note that the Group's activity which is primarily present in cities does not require the implementation of an adaptation plan for the consequences of climate change 74

76 5 CORPORATE GOV- ERNANCE 5.1 BOARD OF DIRECTORS OPERATION OF THE GENERAL MANAGEMENT The Company's Board of Directors, at its meeting of 27 June 2008, voted that the Chairman of the Board of Directors be named Chief Executive Officer COMPOSITION OF THE BOARD OF DIRECTORS, MANDATES AND FUNCTIONS OF SERVING DIRECTORS The Board of Directors is composed of 6 directors, 2 of whom are independent and one of whom is of foreign nationality. For the requirements of their corporate appointments, the corporate officers are domiciled at the Company's head office. Mr Jean-Paul BAUDECROUX 67 years - French Chairman and Chief Executive Officer Date of first appointment: 27 June 2008 Date on which term expires: following the Annual General Meeting called to approve the financial statements for the year ending 31 December 2013 Jean-Paul BAUDECROUX is the founder and main shareholder of the NRJ Group. After having studied economics, he joined Revlon's marketing team in the United States in In 1972, he founded the "Elysées 12-12" hotel reservation service, and then in 1981 ventured into free radio in Paris, founding the NRJ station. Over the years, he purchased local radio stations to develop his network and created other stations, CHERIE FM in 1987, RIRE & CHANSONS in 1990 and purchased NOSTAL- GIE in He is also extending the NRJ concept abroad. In the 2000s, he diversified the activities of the NRJ Group, entering television with NRJ 12, NRJ PARIS and NRJ HITS, and musicals with THE SUN KING, CLE- OPATRA and at present 1789 LES AMANTS DE LA BASTILLE. The Group also has its own broadcasting company, TOWERCAST. Lastly, in 1999, he created the NRJ French Institute for medical research, mainly focused on neuroscience. Based on donations, the NRJ foundation is one of the largest in France. On 31 December 2012, Mr Jean-Paul BAUDECROUX held 62,780,838 shares and voting rights. Other mandates and functions exercised in 2012 or currently held in the Group's companies: Ms Vibeke Anna RÖSTORP 41 years - Swedish Director Date of first appointment: 27 June 2008 Date on which term expires: following the Annual General Meeting called to approve the financial statements for the year ending 31 December 2013 Vibeke ROSTORP is the partner of Jean-Paul Baudecroux. She has held a doctorate in the history of art since December Her doctoral thesis "Swedish and Norwegian artists in France from 1889 to 1908, the myth of return" will be published in April She is also an art critic and an independent cultural journalist for the large Swedish national daily "Dagens Nyheter". On 31 December 2012, Ms Vibeke RÖSTORP owned 1 share and two voting rights. Other mandates and functions exercised in 2012 or currently held in the Group's companies: Member of the Supervisory Board of NRJ SAS since 19 May 2010 (unlisted French company). Other mandates and functions exercised over the last 5 years, or currently held, in non-group companies: Wrote articles for SAUR, a German dictionary of artist biographies (formerly "Allgemeines Künstlerlexikon"), until April Ms Muriel SZTAJMAN 50 years - French Director Date of first appointment: 20 May 2010 Date on which term expires: following the Annual General Meeting called to approve the financial statements for the year ending 31 December 2013 Muriel SZTAJMAN is the niece of Jean-Paul Baudecroux. She holds a diploma as a trilingual secretary. She began her career as an executive/marketing assistant at Framatome, Helena Rubinstein and Finder. She joined IER in 1986, where she currently exercises the function of communications officer. At 31 December 2012, Ms Muriel SZTAJMAN held 2 shares and 4 voting rights. Other mandates and functions exercised in 2012 or current held in the Group's companies: Nil Other mandates and functions exercised over the last 5 years or currently held in non-group companies: Nil Chairman of the Supervisory Board of NRJ SAS since 27 May 2008 (unlisted French company). Other mandates and functions exercised over the last 5 years, or currently held, in non-group companies: Nil 75

77 Mrs Maryam BREMOND, née SALEHI 49 years - French Director Date of first appointment: 27 June 2008 Date on which term expires: following the Annual General Meeting called to approve the financial statements for the year ending 31 December 2013 Qualified as a lawyer and barrister in Paris, Maryam SALEHI began her career in 1990 as a barrister in Paris where she specialised in business and competition law. She joined NRJ GROUP in 1997 as the Group's Chief Legal Officer. Associated with the Group's growth and diversification, she notably participated in the acquisition of the RADIO NOSTALGIE network and the development of the television division. In 2008, she was appointed Group General Secretary. After this she was appointed Managing Director within the Group's general management, reporting to Jean-Paul BAUDECROUX. In this position, she steers the implementation of synergies between the Group's different units and coordinates new projects. She also supervises the functions that previously reported to the General Secretariat, as well as the Legal Department, Human Resources, Company Law and the Purchasing Department. On 31 December 2012, Ms Maryam SALEHI held 5 shares and 10 voting rights. Other mandates and functions exercised in 2012 or current held in the Group's companies: Chairman of RIRE ET CHANSONS since 10 September 2009 Manager of NRJ MUSIC since 10 August 2009 Manager of NRJ ENTERTAINMENT since 10 August 2009 Manager of NR Publishing since 15 July 2008 Manager of ANIMATION ET DEVELOPPEMENT MENTON-AZUR-ROYA-MAR since 7 January 2013 Other mandates and functions exercised over the last 5 years, or currently held in non-group companies: Member of the Supervisory Board of 7 L from 28 February 2006 to 30 June 2010 (unlisted French company) Mr Antoine GISCARD D'ESTAING 52 years - French Independent director Date of first appointment: 27 June 2008 Date on which term expires: following the Annual General Meeting called to approve the financial statements for the year ending 31 December 2013 Antoine GISCARD D'ESTAING is a graduate of HEC and a former ENA student. After four years at the Inspectorate of Finance, the first part of his career was spent as financial director at the Suez-Lyonnaise des Eaux Group, from 1990 to In 2000, he joined SCHNEIDER ELEC- TRIC as head of finance, management control and legal affairs. Then, from 2005 to 2007, he worked as general manager of finance, strategy and IT systems at Danone, before being appointed company secretary of Danone. In 2008 and 2009, was a partner at BAIN & COMPANY PARIS before joining the CASINO GROUP in 2009 as Chief Financial Officer and member of the executive committee. At 31 December 2012, Mr Antoine GISCARD D ESTAING held shares in the group, with 2,800 voting rights. Other mandates and functions exercised in 2012 or currently held in the Group's companies: Member of the NRJ GROUP Audit Committee since 2 June 2004 (Chairman since 20 May 2010) Member of the NRJ GROUP Appointments and Remuneration committee since 9 September 2005 Other mandates and functions exercised over the last 5 years, or currently held in non-group companies: Chairman of BANQUE CASINO (unlisted French company) since 27 March 2009 Permanent representative of GERMINAL SNC, director of MONOPRIX (unlisted French company) since 29 June 2012 Permanent representative of CASINO GUICHARD PER- RICHON, director of MERCIALYS (listed French company) since 6 April 2009 Director of GRUPO PAO DE ACUCAR (listed company incorporated in Brazil Bovespa stock exchange) since 30 April 2009 Permanent representative of MESSIDOR, director of MONOPRIX from 4 June 2009 to 29 June 2012 Chairman of CASINO RESTAURATION from 31 March 2009 to 2 April 2012 Vice-President and director of the non-profit making association Les Ecoles du Soleil until 2012 Permanent representative of DISTRIBUTION CASINO FRANCE, member of the Supervisory Board of FRANPRIX HOLDING until 2012 Permanent representative of CASINO GUICHARD PER- RICHON, director of INTEXA (listed French company), until 2012 Director of EURONEXT from 2006 to October Partner at BAIN & COMPANY from 1 May 2008 to 31 March Member of the "Collège des Marchés Financiers" then the "Autorité des Marchés Financiers" from 2000 to 2009 Director and Deputy CEO of Cie GERVAIS DANONE from 26 September 2005 until 30 April Director and Deputy CEO of GENERAL BISCUITS from 26 September 2005 until 30 April Member of the executive committee of DANONE Group from 1 June 2005 to 30 April Managing Director Finance, Strategy and Information Systems of DANONE Group from 1 June 2005 to 30 April 2008 Mr François MAZON 54 years - French Independent director Date of first appointment: 27 June 2008 Date on which term expires: following the Annual General Meeting called to approve the financial statements for the year ending 31 December 2013 François MAZON is a graduate of the Ecole Centrale de Paris, Sciences Po and holds a master's degree in private law. He began his career in 1983 as account manager at IBM. In 1990, he joined Capgemini, where he became managing director, France, in In 2004, he was appointed managing director France Morocco Asia for Steria, before joining Linagora from 2009 to 2012, where he was development manager. Since 1 December 2012, he has been Senior Advisor at TNP Consultants. 76

78 On 31 December 2012, François MAZON held 1,001 shares and 1,002 voting rights. Other mandates and functions exercised in 2012 or currently held in the Group's companies: Member of the NRJ GROUP Audit Committee since 27 June 2008 Other mandates and functions exercised over the last 5 years or currently held in non-group companies: Director of PASSERELLES NUMERIQUES (ONG) since 2009 Director of the Université de Bretagne Sud since 1 June 2012 Member of the monitoring committee for university reform (LRU law) since February 2011 Director of COMPARIO (unlisted French company) from 15 March 2011 to January 2013 Head of development at LINAGORA from 1 March 2009 to 30 June 2012 Managing director, France Morocco Asia for STERIA from September 2004 to 27 October 2008 Group Senior Executive Vice-Chairman Group STERIA from September 2004 to 27 October OBSERVER Mr Jérôme GALLOT 53 years - French Date of first appointment: 27 June 2008 Date on which term expires: following the Annual General Meeting called to approve the financial statements for the year ending 31 December 2013 Other mandates and functions exercised in 2012 or currently held in the Group's companies: Chairman of the NRJ GROUP Appointments and Remuneration committee since 16 December 2008 Other mandates and functions exercised over the last 5 years, or currently held in non-group companies: Director of NEXANS since June 2007 Director of PLASTIC OMNIUM since December 2006 Director of CAIXA SEGUROS SA (Brazil) since February 2005 General Manager of VEOLIA TRANSDEV from 3 March 2011 to 3 December 2012 Member of the Supervisory Board of SCHNEIDER ELECTRIC SA (listed French company) from May 2006 to 3 May 2012 Member of the Executive Committee of Fonds Stratégique d'investissement from 1 February 2009 to 31 March 2011 Chairman of CDC Entreprises from 1 September 2006 to 31 March 2011 Chairman of AVENIR ENTREPRISES from 1 September 2006 to 15 March 2011 Observer of OSEO from September 2006 to 15 December 2010 Director of ICADE SA from March 2004 to November 2010 Director of CNP Assurances from March 2004 to 22 June 2010 Jérôme GALLOT is a graduate of the IEP Paris, holds a master's degree in law, and is a former ENA student. He began his career at the Revenue Court in 1983 before joining the Ministry of Finance (Managing Director of the DGCCRF). In 2003, he became manager of the Caisse des Dépôts et Consignations before being appointed chairman of CDC Entreprises in After this he was General Manager of VEOLIA TRANSDEV before becoming advisor to the company's chairman in December On 31 December 2012, Mr Jérôme GALLOT held 900 shares and 1,200 voting rights. 77

79 5.2 REMUNERATION Remuneration paid and options / shares awarded to executive corporate officers REMUNERATION PAID AND OPTIONS/SHARES ASSIGNED TO MR JEAN-PAUL BAUDECROUX (SERVING CEO) Summary table (in euros) Financial year 2011 Financial year 2012 Remuneration due for the financial year (detailed in following table) 767, , Valuation of options assigned during the year Nil Nil Valuation of performance shares assigned during the year Nil Nil TOTAL 767, , Details of remuneration (in euros) Financial year 2011 Financial year 2012 Amounts due Amounts paid Amounts due Amounts paid Fixed remuneration 354, , , , Variable remuneration 410, , , ,000 Exceptional remuneration Directors' fees Benefits in kind (car) 2,616 2,616 2,616 2,616 TOTAL 767, , , , Jean-Paul BAUDECROUX's fixed salary for his corporate mandate within the company was set by the Board of Directors for 2012, after consultation with the appointment and remuneration committee, at a gross figure of 309,000 ( 350,000 gross for 2013). This remuneration reflects his experience and seniority within the Group. In addition to this fixed pay, the Board of Directors, having consulted with the appointment and remuneration committee, has paid him a variable remuneration since 2010 (capped at 410,000 gross for 2012 and set at a gross figure of 403,000 after he waived 7,000 gross from the total amount awarded to him. For 2013, the amount has been capped at 403,000 gross based on quantitative criteria linked to the Group's performance (the current Ebit level). The extent to which these quantitative targets have been reached has been established clearly, but has not been made public for reasons of confidentiality. He also receives a fixed remuneration of 45, for his role as Chairman of the supervisory committee of NRJ SAS and has the use of a company car (benefit in kind of 2,616). Situation regarding AFEP/MEDEF recommendations Jean-Paul BAUDECROUX is the beneficiary of: An employment contract Supplementary pension plan Compensation or benefits due or likely to be due because of cessation or change of functions Compensation relative to a non-competition clause yes no yes no yes no yes no x x x x ATTENDANCE FEES AND OTHER REMUNERATION RECEIVED BY CORPO- RATE OFFICERS WHO ARE NOT DIRECTORS For the past financial year, the Board meeting of 20 January 2012 decided to pay the following as attendance fees to the observer and directors, with the exception of Mr Jean-Paul BAUDECROUX and Ms Maryam SALEHI: per member every time they attend meetings of the Board of Directors, and for each specialised Committee, - an outright amount of 7,500 to each member of the Audit Committee. 78

80 Summary table for all corporate officers in office in 2012 (in euros) Amounts paid in FY 2011 Amounts paid in FY 2012 Directors' fees Other remuneration Directors' fees Other remuneration Vibeke Anna RÖSTORP 6, , Muriel STAZJMAN Maryam SALEHI , , Antoine GISCARD D'ESTAING 18, , François MAZON 15, , TOTAL 40, , , , The observer, Mr. Jérôme Gallot, received a total of 18,000 in directors' fees in Details of the remuneration of Maryam SALEHI (director having the capacity of employee) (in euros) Financial year 2011 Financial year 2012 Amounts due Amounts paid Amounts due Amounts paid Fixed remuneration 190, , , , Variable remuneration 380, , , ,000 Exceptional remuneration , Directors' fees Benefits in kind TOTAL 570, , , , In addition to her role as corporate officer, Ms Maryam SALEHI is employed as a director in the General Management division and in this regard she receives a fixed salary which takes account of her responsibilities (she received a fixed remuneration of EUR190,000 gross for 2012 with an amount of 210,000 gross set for 2013) and a variable pay (for 2012, the amount was capped at 380,000 gross, and reduced to 370,000 gross following her waiver of 10,000 gross out of the total amount awarded to her. For 2013, the amount has been capped at 370,000 gross) based on quantitative criteria linked to the Group's performance (current Ebit level). The extent to which these quantitative targets have been reached has been established clearly, but has not been made public for reasons of confidentiality. Moreover, due to good management and a reduction in expenses (according to the division) for 2012, the Board of Directors, after consulting with the appointment and remuneration committee, authorised the payment to Maryam SALEHI of an exceptional package of 80,000 gross for Also, Maryam SALEHI holds options to buy shares (see section ) Share options/performance shares No performance shares or share options were assigned during the financial year to corporate officers by the issuer or any company of the NRJ Group (no share options were exercised during the period by any corporate officers). No final award of performance shares was made in 2012 to the benefit of a corporate officer. No performance share became available for corporate officers over financial year The options awarded in previous periods are listed in

81 5.3 ADDITIONAL INFORMATION CONCERNING DIRECTORS Apart from what is indicated in Article Composition of the board of directors, there is no family connection between the company's corporate officers ABSENCE OF CONVICTION FOR FRAUD, ASSOCIATION WITH A BANKRUPT- CY, INCRIMINATION AND/OR PUBLIC SANCTION As far as the Company is aware, over the last five years, and on the date this document was written, no director or member of general directorate: has been convicted of fraud, has been associated with a bankruptcy, placed under receivership or liquidation, has been the subject of incrimination or official public sanction pronounced by a statutory regulatory authority, has been prohibited by a court from acting as a member of an administrative, management or supervisory body of an issuer or from working in the management or conduct of the affairs of an issuer CONFLICTS OF INTEREST As far as the Company is aware, and on the date this document was written, there are no potential conflicts of interest between the duties of any director with regard to NRJ GROUP and their private interests or other duties. Also, as far as the Company is aware, and on the date this document was written, no director or member of general directorate is bound by a service contract with NRJ GROUP or one of its subsidiaries that specifies the granting of benefits at the end of the said contract TRANSACTIONS WITH RELATED PARTIES Please see note 29 "Transactions with related parties" of the notes to the consolidated financial statements and the special report of the statutory auditors on regulated agreements and commitments. Furthermore, no loans or guarantees have been given or made by the Company in favour of any director OTHER INFORMATION As far as the Company is aware and on the date this document was written, there is no arrangement or agreement with the main shareholders, customers, suppliers or other parties pursuant to which a director or a member of the Directorate General has been selected. For directors and senior management, there are no restrictions on the sale within a certain period of time, of their stakes in the share capital of NRJ GROUP, with the exception of rules relating to the prevention of insider trading and the obligation to hold at least 1 (one) NRJ GROUP share for the duration of their mandate. 80

82 5.4 REPORT FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS ON THE COMPOSITION OF THE BOARD, THE CONDITIONS FOR PRE- PARING AND ORGANISING THE WORK OF THE BOARD AND ON THE PROCEDURES FOR INTERNAL AUDIT AND RISK-MANAGEMENT Dear Shareholders, Pursuant to the clauses of Article L of the Commercial Code, it is my duty as Chairman of the Board of Directors of your company, whose shares are traded on a regulated market, to give account, in a report attached to that of the Board: on the composition of the Board and the application of the principle of a balanced representation of women and men therein, the conditions for preparing and organising the work of the Board, on any limits to the powers of the Chief Executive Officer, and the special terms relating to the participation of shareholders in Annual General Meetings, on procedures for internal audit and risk management implemented by the Company. This report also specifies the principles and rules adopted for determining the remuneration and benefits in kind granted to corporate officers. I have made the financial department, the internal audit department and the legal department of the Group's companies responsible for the preparatory work and checks necessary for the preparation of this report. To this end, the companies' legal departments have reviewed the various regulations applicable to the first part of this "corporate governance" report. The financial department and the internal audit department have reviewed the procedures for internal audit and risk management described in the second part of this report. The present report was presented to the audit committee on 31 January 2013, approved by the board of directors on 19 March 2013 and sent to the independent auditors. To begin with, I would like to draw your attention to the fact that, in accordance with the clauses of Article L of the Commercial Code, the information concerning the structure of the Company's capital and factors likely to have consequences in case of a public offer are explained in the Board's management report CORPORATE GOVERNANCE CONDITIONS FOR THE PREPARATION AND ORGANISATION OF THE WORK OF THE BOARD Concerning the corporate governance code, our Company refers to the AFEP/MEDEF corporate governance code for listed companies (consolidated code dated December 2008, updated in April 2010, available on the website Nevertheless, the following recommendations of this market standard have been excluded: AFEP/MEDEF recommendations excluded Spreading out of director terms ( 12) Composition of the appointment and remuneration committee ( 16) Number of shares owned by the directors ( 17) BOARD OF DIRECTORS Composition The members Reason There is a small number of directors and their term is short: 2 years The appointment and remuneration committee comprises one independent director and the censor who fulfils the independence criteria defined by the AFEP/MEDEF corporate governance code. This varies and is not always significant. For the Company, the number of shares held by the directors is not correlated with their commitment to their appointments. The Board is composed of 6 members, who are appointed for a period of 2 years: Mr Jean-Paul BAUDECROUX, Chairman and Chief Executive Officer, Ms Vibeke RÖSTORP, Ms Muriel SZTAJMAN Ms Maryam SALEHI, Mr Antoine GISCARD D'ESTAING, Mr François MAZON. As half the Board members are women, the principle of equal representation of women and men on the Board is fully respected. To exercise their mandates, each director must own at least one share in the Company and the number of directors having reached the age of 80 years must not exceed one third of the members of the Board of Directors. The independent members There are two independent directors on the Board (Antoine GISCARD d ESTAING and François MAZON) out of a total of six (one third of the total number of directors) who indicated to the Board their satisfaction with the independence criteria of the Board members, as set out in Article 2.2 of the Board's internal regulations. The independent directors are given the role of overseeing compliance with the Company's internal regulations and ethics charter. 81

83 In a decision dated 21 January 2013, the Board noted that Antoine GISCARD d ESTAING and François MAZON still fulfilled the conditions stipulated in the AFEP/MEDEF corporate governance code (and referred to in the Board's internal regulations) to qualify as independent directors, namely: they must not be an employee or corporate officer of the Company, an employee or director of the parent company or a company that it consolidates, and these conditions must have applied during the five years preceding their appointment to the Board of Directors; they must not be a corporate officer of a company in which the Company, or one of the companies that it consolidates directly or indirectly, holds an appointment as director; or in which an employee designated as such or a corporate officer of the Company or one of the companies that it consolidates (currently or that was consolidated less than five years ago) holds an appointment as director or member of the supervisory board; they must not be 1 linked, to a client, supplier, commercial partner, investment banker or commercial banker that is significant for the Company or its Group or for which the Company or its Group represents a significant share of business; they must have no family links with a corporate officer of the Company; they must not have been an auditor of the company during the previous five years; they must not have been a director of the Company for over twelve years; they must not, directly or indirectly, hold an investment greater than or equal to 10% of the equity capital or voting rights in the Company or one of the companies of its Group, or be related in any way whatsoever to a shareholder with an investment greater than 10% in the Company or a company of its Group. The Board moreover noted during its meeting of 21 January 2013, bearing in mind the share of advertising revenue generated by the Casino Group on the Group's national and local radio revenue in France (less than 1%), the insignificant nature of the Group's business relations with Casino Group, of which Antoine GISCARD d ESTAING is the chief financial officer. Furthermore, generally, as far as the Company was aware on the day that this report was established, there was no conflict of interest between the duties of each member of the Board in relation to the Company or their private interests or other duties. Observer Mr Jérôme GALLOT was reappointed as Observer for 2 years by decision of the Board dated 10 May Pursuant to Article 15 of the Company's Articles of Association, the Board of Directors appoints the Observer for a period of two years to oversee the application of the Company's Articles of Association. He may also issue an opinion on any item on the Board's agenda. He has consultative powers only. Operation of the Board The Board of directors acts in the Group's corporate interest. It discusses all major questions in the life of the Group, determines the policy for the company's business and oversees its implementation. Subject to the powers expressly granted at Annual General Meetings and within the limit of the corporate purpose, it considers all questions relating to the correct operation of the Company and settles business relating to the Company through its discussions. It also proceeds with the checks and inspections that it considers appropriate. As well as the duties and responsibilities of the Board under the law, the Chief Executive Officer, if this function is not borne by the Chairman of the Board of Directors, must submit for express and prior approval any operation that is likely to modify the financial structure or area of business of the Company (Article 13.5 of the articles of association). Internal rules of the Board The work of the board is organised according to its interior regulations (regulations dated 20 January 2012) which are intended to supplement the legal, regulatory and statutory rules to which the board as a whole and directors in particular are subject. The internal rules specify the terms under which the Board and its advisory committees function. These internal rules address the following subjects in particular: Composition of the Board of Directors The internal regulations specify the main statutory provisions related to the composition of the board of directors: number of members, process of co-option and ratification of an appointment by the ordinary general meeting, period of appointment, age limit, etc., and it defines the duties and responsibilities of the Chairman and those of the Vice-Chairman and specifies the appointment of a Secretary. The persons who are not directors who regularly attend meetings of the Board are the Secretary to the Board, the Observer, the Executive Director - Finance and International Activities, the Representative of the Senior Management and the Financial Department and the members of the employee-representative committee. 1 or directly or indirectly linked 82

84 Duties and powers of the Board of Directors Duties of the Board The internal rules state that as well as the legal duties and responsibilities of the Board of Directors, it must also give its prior authorisation for some operations to be carried out by the Chief Executive Officer when he/she is not Chairman of the Board (Article 13-5 of the articles of association). Information and communication addressed to the Board of Directors The working documents relating to any meeting of the Board must be sent to members of the Board at least 3 days before the meeting. Meetings and decisions of the Board of Directors Meetings of the Board The internal rules specify the legal and statutory rules for summoning directors and setting the agenda for the Board meeting. Invitations are made by any means and sent at least two days before the Board meeting. Annual board self-assessment meeting Once a year, the board of directors proceeds with its assessment and that of the audit committee and the appointments and remuneration committee (specialist committees) through a questionnaire sent in advance to directors. The assessment mainly covers the composition of the board, the periodicity and duration of meetings, the subjects dealt with, the quality of debates, information to directors and the work of the specialist committees. For 2012, the result of this exercise was the subject of deliberation during the board meeting dated 17 December The Board was satisfied with the rate, frequency and format of the information transmitted to it during the Board meetings. The same remarks were made concerning the specialised committees. Moreover, the directors said they would like to see the organisation of one meeting every year on the planned medium and long-term evolution of the Group's different activities. Decisions of the Board The decisions of the Board of Directors are taken under the conditions of quorum and majority specified by the law. In case of an indecisive vote, the Chairman will have the casting vote. The members of the Board may participate in meetings of the Board by video-conference or telecommunication, at the choice of the author of the invitation, in accordance with regulatory measures. The decisions of the Board of Directors are recorded by minutes established, signed and retained in accordance with regulatory measures. Rules applicable to members It should be noted that directors have a certain number of general obligations, such as compliance with legislation on plurality of mandates and the prohibition on accepting a corporate mandate in a company that is a competitor to the Group NRJ. Directors contravening this rule will be considered to have compulsorily resigned if they have not regularised their situations within three months from the appointment that places them in a situation of infringement. The internal rules also state the rights and duties of members, such as the right to information, the duty of secrecy and the obligation to hold the Company's shares, the transactions forbidden in the Company's shares and the obligations concerning independence and information relative to situations of conflict of interest. In the event of a conflict of interest, the director in question must, where relevant, abstain from participating in the corresponding decision, refrain from attending board meetings or resign from the board. Also, the chairman of the board has the option not to send any information or documents relating to the contentious subject to directors whom he has serious reason to believe may be in a situation of conflict of interest. Functioning of the Senior Management, Committees, Observers and Business Ethicist Lastly, the internal rules of the board of directors supplement the functioning rules of the governing board and the rules common to the advisory committees (the audit committee and appointments and remuneration committee) and define the appointment rules and duties of the observer and the business ethicist. Obligation of secrecy and confidentiality Finally, the internal rules of the Board of directors enact the obligation of secrecy and the strict obligation of confidentiality which all people attending the board meetings are obliged to respect regarding information provided to the Board and its discussions and decisions. Activity of Board of directors The Board meets as often as legal clauses and the Company's interest require it to do so. During the last financial year, it met 8 times, with the presence of 5 members on average (average attendance rate of 83%). Representatives of the Works Committee were invited to attend all of the board meetings but did not attend all of the meetings held in The Independent Auditors were invited to meetings of the Board giving a ruling on the annual or half-yearly accounts. The Board decided on all matters that had to be placed on its agenda in accordance with regulatory and legal clauses in force. 83

85 In 2012, the main points decided by the board were as follows: The accounts and the budget: o Closure of the individual and consolidated accounts for the financial year ending on 31 December 2011, o Closure of the half-yearly consolidated accounts on 30 June 2012, o Preparation of documents for management planning, o Revision of the 2012 budget and adoption of the 2013 budget. The financial information/financial reports Preparation for the Annual General Meeting of 10 May 2012 Corporate governance: o Self-assessment of its functioning, o Remuneration of the Chief Executive Officer and one salaried director (regulated agreement) and setting and distribution of directors' attendance fees, o Renewal of the term of office of the directors, the Chairman and CEO, the members of the audit committee, the members of the appointment and remuneration committee, the chairman of the audit committee, the chairman of the appointment and remuneration committee and the Observer, o Update of the ethical charter, o Policy of the company in matters of professional and salary equality. Shares/capital o Implementation of the share buyback programme, o Adjustment of the price of share purchase options, o Change in allocation of treasury shares, o Capital reduction by cancelling shares. Prior authorisation for guarantees The Board meeting of 22 October 2012 related to the Company's policy on the principal of professional equality between men and women showed that, as noted in the previous year, the Group naturally complies with the principal of professional equality between men and women. During 2012, the Group signed on behalf of the two employment units a collective agreement on the subject of professional equality between men and women, which now serves as a formal framework for professional equality between women and men within the Group. COMMITTEES WITHIN THE BOARD OF DIREC- TORS Audit committee Regarding the audit committee, the Company refers to the report written by the financial markets authority work group presided by Mr Poupart Lafarge on the audit committee meeting of 22 July As the company is a small and medium-cap group (VaMP), its Committee is comprised of two members (see composition hereunder), bearing in mind that the Observer, who satisfies the conditions of independence defined by the AFEP/MEDEF code of corporate governance, regularly attends committee meetings. Composition and functioning This Committee is made up of two independent directors, Antoine GISCARD D'ESTAING and Mr François MAZON, with Mr Antoine GISCARD D'ESTAING the chairman. After specifying in its decision of 28 January 2011 that it felt it was necessary to take into account the professional experience and/or education of a person in order to decide if he/she had a specific competency (see paragraph of the present registration document) in the finance and/or accounting of listed companies, the Board believes that given their professional experience, Messrs Antoine GISCARD D ESTAING and François MAZON must be considered as having specific expertise in financial matters. The internal regulations specify the rules related to the make-up of the committee: number of members, length of term, expertise of members, etc. and its rules of operation: the committee meets at least three times a year and reports its work and conclusions to the board of directors. In, particular, it meets prior to each Board meeting, for which the agenda includes the examination of the annual or interim accounts. It also meets at least once a year to give its verdict on the internal audit plan and examine the statutory auditors response plan. Tasks The Audit Committee has no decision-making power; it advises and makes recommendations to the Board. It acts under the responsibility of the directors and has the task of ensuring the follow up of issues relating to the preparation and monitoring of accounting and financial information. The Audit Committee is responsible for monitoring the: (i) financial reporting process, (ii) effectiveness of internal audit and risk management, (iii) statutory audits of the annual accounts and consolidated accounts and (iv) independence of the statutory auditors. Meetings of the Audit Committee The audit committee met 3 times in 2012 and had a 100% participation rate. During these meetings, the following main matters were studied: the internal audit plan, the 3-year plan, the plan for the work of the Independent Auditors, the individual and consolidated accounts for the financial year closing on 31 December 2011, the half-yearly consolidated accounts on 30 June 2012, the examination of draft press releases on annual and half-yearly results, the presentation of the chairman of the board's report on internal audit, Minutes of these meetings were produced during the Board meeting following each meeting. 84

86 Appointments and remuneration committee Composition and functioning This Committee is composed of at least two members. It may not include any executive corporate officer and the majority of members must be independent directors or Observers, as defined under the internal rules of the Board of directors. These officers and their chairman are appointed by the Board of directors for the duration of their term of office as director or observer. The Committee is currently composed of the following persons: Mr Jérôme GALLOT, Observer, Chairman of the Appointments and Remuneration Committee, Mr Antoine GISCARD d'estaing, independent director, member of the Appointments and Remuneration Committee. Its internal rules specify that the committee meets each time it considers necessary, upon invitation by its chairman or one of its members, or any person that they may have mandated for this purpose. The Chairman of the committee or one of its members gives an account of the work carried out at the next Board meeting, in the form of information, advice, proposals, recommendations or exact and extensive minutes. Under no circumstances may a member of the Committee take part in decisions concerning that member. Tasks Remuneration As part of this task, in particular, the Committee: proposes the overall amount for directors' fees, which will be subject to the vote of the Annual General Meeting, together with the terms for their division. Furthermore, the Committee gives an opinion on any proposal for remuneration that the Board may wish to allocate to a director responsible for a particular assignment or mandate. examines and makes proposals concerning the fixed and variable remuneration of corporate officers. In this respect, the committee may be approached by the Chairman of the Board of Directors if the agenda for any Board meeting contains a request for prior authorisation, according to articles L et seq. of the Commercial Code, concerning a modification to the employment contract of a director, the Chief Executive Officer or a Deputy CEO that alters the remuneration that he/she receives under this employment contract; or concerning any commitments for retirement or related to departure compensation undertaken by the Company or one of its subsidiaries for the benefit of a corporate officer. is informed of the remuneration policy for the main non-corporate-officer senior managers of the Company and makes proposals at Board meetings concerning systems for remunerating and motivating these persons. gives an opinion on the general policy for assigning free shares, share options, or any other financial instrument, etc. Nominations The Committee is responsible for preparing the composition of the managing bodies of the Company. In particular, it plays a part in selecting corporate officers. It makes recommendations concerning: proposals for appointments made to the annual general meeting and, if the occasion arises, for co-opting directors, proposals for the position of Chief Executive Officer of the Company, a position assumed either by the Chairman of the Board of directors or by another individual having the role of Chief Executive Officer, the Board's proposal to appoint its Chairman, Chief Executive Officer and, where appropriate, any Deputy CEOs, proposals for appointments by the Board of directors of members of the audit committee and the appointments and remuneration committee taking into consideration the respective tasks of these committees. The Committee's choice of candidates for the position of director is guided by the interests of the Company and all its shareholders. The Committee may take the following items into consideration: the desired balance of the Board's composition, given the composition and changes in the Company's shareholding structure and its breakdown in terms of men and women, the possible representation of categorical interests, the opportunity for the renewal of terms of office, the integrity, competence, experience and independence of each candidate, the desired number of independent members. The Committee also acknowledges the appointments of the main senior executives of the Group who are not corporate officers of the Company and examines, in an advisory capacity and at the request of general management, the proposals relating to the appointment and dismissal of the company s managing directors. The Committee also makes recommendations concerning the retirement and provident-insurance plans, miscellaneous benefits, and remuneration for corporate officers, and on the financial conditions of the cessation of their mandates. 85

87 Committee meetings The committee met 3 times in 2012 and had a 100% participation rate. During these meetings, the following matters were mainly dealt with: the budget for director's fees for 2012, along with its breakdown, the fixed and variable remuneration of the CEO and salaried directors for 2012, the renewal of directors' terms of office and the qualification of certain directors as independent directors, the renewal of the term of office of the CEO, of the members of the audit committee, the members of the appointments and remuneration committee, the chairman of the audit committee, the chairman of the appointment and remuneration committee, and the observer, a draft bonus incentive plan. Minutes of these meetings were produced during the Board meeting following each meeting PROCEDURES FOR EXERCISING GENERAL MANAGEMENT AND LIMITATION ON CEO'S POWERS Pursuant to Article 13.5 of the articles of association, the Chief Executive Officer, if this function is not assumed by the Chairman of the Board of Directors, must submit for express and prior approval of the Board of Directors, all operations likely to modify the financial structure or area of business of the Company, and particularly (see list in Article 13.5 of articles of association): the sale, exchange or contribution of a participating interest, a manufacturer s mark, a business or a building, concluding loan agreements on the Company s behalf other than for its current requirements, granting sureties, participating in the formation of any company, or the contribution of all or part of the Company s assets to a company that has been or is to be formed, the approval or modification of the budget, making unbudgeted investments amounting individually or cumulatively to more than 1.5 million over a quarter, amending the terms of the NRJ brand franchise agreement concluded with NRJ, more generally, any significant reorganisation or restructuring of the Company. This limit is stated in the internal rules of the Board of Directors. In practice, the transactions covered by the limitation of powers are often debated by the Board even if the functions of Chairman and Chief Executive Officer are combined SUMMARY OF THE CORPORATE OFFICER REMUNERATION POLICY REMUNERATION OF MEMBERS OF BOARD OF DI- RECTORS (DIRECTORS' FEES) Until any new decision is taken, the Annual General meeting of 20 May 2010 set the maximum amount of director s fees at 65,000 euros. On proposal of the Committee of Appointments and remunerations, the Board splits the said director s fees between its members, taking into account whether they were actually present and participated in Board and specialist committee meetings, according to a predetermined table. REMUNERATION OF CORPORATE OFFICERS Each year, the board of directors, upon recommendation of the appointments and remunerations committee, determines the policy for the remuneration of corporate officers as well as the remuneration of each of them by referring to the recommendations of the AFEP/MEDEF code on the remuneration of executive corporate officers of listed companies. The remuneration policy covers all elements of fixed, variable and exceptional remuneration, plus any benefits of any kind undertaken by the Company. Determination of the fixed and variable share of the remuneration of corporate officers Mr Jean-Paul BAUDECROUX The only corporate officer to receive remuneration for his role as corporate officer is the Chief Executive Officer. The fixed remuneration amount was set at 350,000 gross for 2013 after consultation with the appointments and remuneration committee. This remuneration reflects his experience and seniority within the Group. In addition to this fixed remuneration, from the financial year 2010, the Board of directors, after advice from the Appointments and remuneration committee, has offered him variable remuneration, based on quantitative criteria relating to the group s performance (achievement of a certain level of current operating profit). The extent to which these quantitative targets have been reached has been established clearly, but has not been made public for reasons of confidentiality. He also receives a fixed remuneration of 45, for his role as Chairman of the supervisory committee of the company NRJ SAS and has the use of a company car (benefit in kind of 2,616). He does not receive any directors' fees for his participation in Board meetings. During its meeting on 27 June 2008, the Board decided to have the Chairman of the Board of Directors take the position of Chief Executive Officer. The combination of these powers coincided with the return of Jean-Paul BAUDECROUX, majority shareholder and founder of the Group, as the Group CEO. 86

88 Ms Maryam SALEHI In addition to her appointment as a corporate officer, Maryam SALEHI exercises the salaried function of Deputy General Manager and in this respect receives fixed remuneration that takes into account the level of her responsibilities, together with variable remuneration based on quantitative criteria related to the Group's performance (achievement of a level of EBIT). The extent to which these quantitative targets have been reached has been established clearly, but has not been made public for reasons of confidentiality. Benefits in kind As a benefit in kind, the CEO avails of a company car (benefit valued at 2,616 p.a.) PARTICIPATION OF SHAREHOLDERS IN THE ANNUAL GENERAL MEETING The terms and conditions under which shareholders take part in the annual general meetings are shown in Article 16 of the company's articles of association. Like the Chairman and Chief Executive Officer, she does not receive directors' fees when she is present at meetings of the Board of Directors. Other directors The other members of the Board of Directors received no remuneration apart from directors' fees. Stock options The corporate officers do not benefit from a supplementary pension plan. Stock options were awarded on 15 September 2008 and 14 September 2009, by the Board of Directors on the advice of the Appointments and Remuneration Committee, to a part of the management of the Company and the companies affiliated to it. The exercise of part of the assigned options depends on performance conditions, which were all fulfilled. The Chairman and Chief Executive Officer was not one of the beneficiaries of this award. The only member of the Board of Directors receiving share options was Ms Maryam SALEHI, salaried director. Following the exceptional distribution of a sum levied on the item "Share Premium" decided on by the General meeting of 10 May 2012, the exercise price of stock options has been adjusted by the Board's decision using the following formula: Adjusted exercise price = Initial exercise price (Initial subscription price x pay-out per share) Value of share before distribution * * share value before distribution = weighted average of last three trading days before distribution The new exercise price stands at The number of options was also adjusted to maintain the beneficiaries' level of investment (adjustment of the number of options to ensure that the total purchase price remains constant). Indemnities, benefits and compensation paid to corporate officers due to the termination or change of their duties There is no commitment of this type. 87

89 5.4.2 PROCEDURES FOR INTERNAL AUDIT AND RISK MANAGEMENT This second part of the document aims to report on the internal procedures implemented by the Company concerning the organisation of its internal audit and risk management. The methodology used by NRJ GROUP is based on the reference framework of the AMF, as well as on its implementation guide for mid-cap and small-cap stocks (VaMPs), as updated on 22 July SCOPE OF RISK MANAGEMENT AND INTER- NAL AUDIT The NRJ GROUP's arrangements for risk management and internal audit, as described below, are those applicable to the NRJ GROUP parent company and the majoritycontrolled subsidiaries which are included in the consolidation scope. In 2012, the risk management and internal audit procedures were not extended to any new company, since the Group did not acquire any new subsidiaries under exclusive or joint control. In accordance with the AMF reference framework, these arrangements are adapted to the specific characteristics of each company within the scope and to the relationships between NRJ GROUP and its subsidiaries. LIMITS OF RISK MANAGEMENT AND INTERNAL AUDIT The arrangements for risk management and internal audit, however well designed and well applied they may be, cannot provide an absolute guarantee concerning the achievement of the objectives of the company, which cannot depend on intention alone. Indeed, there are limits inherent in any system and process, resulting in particular from factors such as uncertainties concerning the external world, the exercise of judgement or malfunctions that may occur due to technical or human faults, or to errors. 1) GENERAL PRINCIPLES RELATED TO RISK MANAGEMENT Definition According to the definition in the AMF reference framework, risk represents the possibility of an event occurring, whose consequences might affect the persons, assets, environment or objectives of the company or its reputation. In this context, risk management is a dynamic arrangement that the company defines and implements under its responsibility, including a set of appropriate resources, behaviour, procedures and actions that allow its managers to maintain a level of risk that is considered as acceptable. Objectives The objectives of risk management are as follows: to create and preserve value and assets, primarily including the brands and reputation of the company, by identifying and analysing the main potential threats and opportunities to enable the anticipation of risks, to secure decision-making and the strategic, operational and support processes of the company in order to promote the achievement of objectives through the objective and overall overview of potential threats and opportunities, leading to appropriate risk taking and the adequate assignment of human and financial resources, to ensure that actions are coherent with the values of the company, particularly the values of its brands and those promoted by its ethical charter, to encourage the company's staff to have a common view of the main risks and educate them concerning the issues and risks relative to their activities. Components of the risk management system Organisational framework Risk management is controlled by the board's executive director and the executive director finance with the support of the internal audit department. The operational managers and the managers of support functions handle the main risks with which they are confronted and are assisted in identifying these risks by the internal audit department. Process of risk management Identification and analysis of risks The company is confronted with various types of risk that threaten the achievement of its objectives and for which the consequences, particularly financial, human, legal or concerning reputation, may be significant: - risks linked to activity, - operational, industrial and technical risks, - environmental risks, - legal risks, - financial risks. These risks, described in the "Risk factors and insurance" section of the management report, are listed in a risk map that was produced in 2006 and updated in 2011 concerning the main activities of the Group, which are radio in France and television activities, based on the following methodology: The key processes were segmented into: - Strategic processes, - Core business processes, - Business support processes, - Functional support processes. 88

90 2. 2. The associated risks and their scores were determined by combining: - the in-depth analysis of each process, - a "top-down" approach performed through interviews with the managers concerned to update the risk map for their scope and the associated score, - a "bottom-up" approach based on risks identified with operational staff when writing or reviewing procedures relative to support and functional processes and according to the conclusions of audits carried out. Each process was then attached, using a matrix approach, to the corresponding risks, each risk being the subject of an appropriate description, a score in terms of severity resulting from the combination of impact and probability criteria, and a description of the controls put in place. Risk handling The control activities described below in this report aim to reduce the risks identified and analysed according to the process presented above. As part of the assignments that it performs, the internal audit department checks the actual implementation of internal audit procedures and identifies any residual risks. It issues recommendations relative to establishing appropriate action plans. Also, the internal audit department regularly performs follow-up audits, which aim to ensure the actual reduction of risks identified during previous assignments. Lastly, the Group insurance department: - is responsible for purchasing and centrally managing the insurance policies covering risks that can be insured for the French entities, - is sent an annual report from the foreign subsidiaries on the insurance policies purchased, the level of coverage provided and the associated costs, - monitors claims within its scope and events and developments that may modify the conditions of the policies purchased. Continuous control of the system the implementation of appropriate processes and controls and, where necessary, targeted insurance mechanisms. The internal audit system makes use of the risk management system to identify the main risks and systems to be controlled. It implements the appropriate controls and is the guarantor of their effectiveness. The relationship between risk management and internal audit is expressed in the map of risks with a presentation, for each identified risk, of the associated control systems. 3) GENERAL PRINCIPLES OF INTERNAL AUDIT Definition and objectives According to the AMF s reference framework, internal audit is a Company system defined and implemented under its responsibility. It includes a set of resources, attitudes, procedures and actions adapted to the specific characteristics of each subsidiary and to the Group taken as a whole, which: contributes to controlling its transactions, the efficiency of its operations and the efficient use of its resources, and must enable it to take adequate account of significant risks, whether these are operational, financial or whether they regard compliance. More specifically, internal audit procedures aim to ensure: compliance with the laws and regulations in force, application of the instructions and policies set by the Chief Executive Officer or the Board of directors, the correct functioning of the internal processes of the Company, particularly those concerning the protection of its assets, the reliability of financial and accounting information. By contributing to preventing and controlling the risk of not reaching the targets that the Company has set itself, the internal audit system plays a central role in the conduct and strategic management of the Group's different businesses. In this context, the Company adopts a dynamic approach of adapting its internal audit procedures to the nature and development of its businesses. The internal audit department regularly reviews and monitors the risk management system. The recommendations made following the various assignments carried out under the annual audit plans or on request from the senior management come within a process of continuous improvement. 2) RELATIONSHIP BETWEEN RISK MANAGE- MENT AND INTERNAL AUDIT The arrangements for risk management and internal audit, the basis of which consists of the company's general control environment, assists in controlling activities: The risk management system aims to identify and analyse the main risks facing the company. Those risks exceeding limits that are considered as acceptable are treated appropriately. In this context, the company may have to implement action plans including 89

91 Components of internal audit The internal audit process is based on the following five components:. its organisation,. the internal dissemination of relevant information,. a risk management mechanism,. control activities that meet these risks,. permanent monitoring of the system. Organisation The Group's organisation forms the basis of the general environment of the internal audit. In particular, it is based on: corporate governance, which sets out the powers and responsibilities, objectives organised around a specific budget process that is representative of commitments made by management, reporting, to measure the achievement of objectives, Internal references, constituting practices that are commonly accepted within the Company. A corporate governance that sets powers and responsibilities Board of directors The CEO and the Board of directors deliberated on the major issues affecting the Group and provide broad strategic directions. The composition and functioning of the Board of directors and specialist committees set up within it, as well as the organisation of their work, combine to ensure the sound operation of the Company and the effectiveness of internal audit, in accordance with the process described in the first part, "Corporate governance", of the present report. Managing directors Bearing in mind that: the operational managers of the radio stations in France report directly to the CEO, and that the Property and General Services Department are allocated a specific delegation, the decision-making and control processes related to the other activities are based on a set of delegations conferred by the CEO to the Managing Directors: The deputy general manager is in charge of legal and general corporate affairs, the legal department, the human resources department, the corporate law department, the procurement department, the barter department and, jointly with the executive director finance and international business, the internal audit department, The Managing director of the Television division, The Managing director, who is responsible for commercial development, The Managing director of the Technical division, who is in charge of technical broadcasting services and information systems, The Managing director for Finance and International business. Delegations of authority and signatures are validated by the Chief Executive Officer on the recommendation of Deputy Director at the Directorate General. As it precisely fixes the areas and levels of decision assigned to different parties, they thereby constitute a repository the application of which can be verified by the Internal Audit department. Objectives organised around a specific budget process that is representative of commitments made by management, Annual budget The process of budget preparation begins when the Chairman and CEO sends a budget policy letter to the Executive Directors and Operational Directors concerned, setting their strategic objectives, such as changes to revenues and costs, together with qualitative objectives. Each executive director then prepares a budget in compliance with the budgetary policy, with the support of the administrative and financial teams within his/her scope: administrative and financial managers, operational management controllers, etc. The budgets are presented individually and in a consolidated manner during budget meetings with the senior management and the head of finance, and any necessary amendments are made at this stage. Following these meetings, the Group Management Control department establishes the Group budget, which is then presented to the Board of Directors. After the Group Budget has been adopted by the Board of Directors, it constitutes the budgetary reference framework for the coming financial year. At least once a year, an updated forecast of consolidated EBIT before dissimilar barters for the current year is prepared by the various budgetary managers, consolidated by the Group management control department and presented to executive directors. 3-year plan After the Group Budget has been adopted by the Board of Directors, the Group Management Control department consolidates a 3-year plan based on data prepared by the different budget managers. This 3-year plan, which in particular is used as a basis for loss in value tests, is presented to the audit committee and then the board of directors. Reporting enabling a measure of the level of achievement of objectives Monthly reporting A management report including a report on consolidated revenue, together with a report on current EBIT before dissimilar barters, is produced monthly. It examines the results, compliance with objectives and highlights the contribution of subsidiaries and their operational units to the overall performance of the Group. This report is produced from the various monthly operational reports, which are consolidated by the Group Man- 90

92 agement Control department. The Group monthly report is sent to the Chairman and CEO and to the Executive Directors. Specific reports The following specific reports are written in the Group in order to cover operating needs: a report on national advertising revenues, which is prepared and sent each day to the Chairman and Chief Executive, the Executive Directors concerned, and the main senior managers of NRJ GLOBAL SAS, a consolidated report of revenues from national and local advertising departments in France is established on a weekly basis, different reports, particularly concerning revenues relating to international businesses, a Group cash report established monthly, providing the Chairman and Chief Executive Officer and Executive Directors with information on the Group's level of net current cash, the division of investments by category and changes to the Group's current accounts. Internal references, constituting practices that are commonly accepted within the Company. Ethics charter The ethics charter applicable to NRJ GROUP's French subsidiaries bases the development of the activities of NRJ Group on a set of ethical values and principles, which senior managers and employees refer to and comply with in all circumstances. Respect for the person, rigour, economic performance, the search for excellence, trust, fairness, honesty, transparency and integrity are the essential values of NRJ Group, with which each person within the Group must comply. These values are reflected in the principles for professional action and individual behaviour that form the basis of the relationships that NRJ Group intends to develop with its clients, suppliers, shareholders and employees, and with the authorities. Adoption of the ethics charter, by senior managers and employees, contributes to securing and improving the process of internal audit. The ethics charter was amended in 2012 to take account of the new provisions of Article L of the French Social Security Code relative to amounts or benefits allocated to an employee by a person not qualified as an employer. Information Technology Charter The purpose of the IT charter is to specify the main rules and precautions that each user must respect and implement when using the information systems belonging to companies of the Group: IT hardware, communication systems and information and data. The Information Technology Charter, implemented in 2004, applies to the French companies of the Group. Note on the prevention of insider dealing This note, which was introduced within the Group in 2007, reminds the Company's corporate officers and employees of its direct and indirect subsidiaries about the legal and regulatory duties imposed on them in the purchase and sale of NRJ GROUP securities. IT was updated in January 2011 to address the recommendations issued by the AMF in its guide of 3 November 2010 on the prevention of insider dealing attributable to the directors of listed companies.. On this occasion, it was completed with a paragraph instituting negative windows and a paragraph relating to the appointment of a business ethicist, who may be consulted before the completion of transactions on NRJ GROUP securities. Group procedures Compliance with procedures specific to each business is the responsibility of the General manager of the division in question, while the respect of Group procedures relates to that of Functional departments and services: Legal department, Company legal service, Human resources department, General services, Information systems department, Technical services and the Finance department. In addition to the general objectives mentioned above, the policies, procedures and practices of internal audit that are currently in force in the Group mainly aim to: ensure that management actions come within the strategic policies decided by the Board of Directors and that they are compliant with the Group's internal regulations and with annual budgetary objectives, check that the accounting, financial and management information communicated to the Board of Directors and to shareholders honestly and accurately reflects the activity and situation of the Group. Each business division has its own processes related to the nature of its products and its economic model. Within each business division, the processes are structured around policies, procedures and practices that are specific to it, and around Group procedures, especially those defined and formalised in France, particularly relating to an integrated information system (SAP). The Group is working on improving its internal audit system through greater formalisation and centralisation of existing procedures, notably those related to key operating processes. 91

93 Internal distribution of relevant information Company employees must be entitled to timely information that is relevant and reliable, which is needed to carry out their activities. In order to do this, in particular the Group relies on its organisation and its different intranet sites and documentary databases, ensuring the respect and enforcement of its obligations in terms of confidentiality. Organisation Within each operational or functional department and each Group entity, in compliance with the general principles set by the Group, management is responsible for choosing the nature and relevance of information to be communicated to the different persons concerned in such a way that Company employees may always have the information that is necessary for the exercise of their functions and that executive management is able to take timely and appropriate decisions. In this context, the diffusion of information within the Group is particularly done via different internal committee meetings, the main ones of which are as follows: General Information Committee Several times a year, the general information committee brings together the Group's main managers so that the Board can: provide information on the Group's strategic policies and their implementation, and, generally, optimise the circulation of information within the Group concerning its development and its functioning, including its internal audit system. Managers are invited to share the information disclosed at these committee meetings, particularly during ad hoc meetings with their collaborators. Specialised Committees Through periodic meetings, the main operational and functional departments within the Group organise specialised committees: Radio-station committees within the radio and television divisions, advertising committee, financial committee, etc. Intranet sites and document databases The different intranet sites and internal or external document databases to which employees have access facilitate information sharing within the Group. In particular, the Group's intranet enables access: to general information communicated by the human resources department and the procurement department, to information flows, to Group procedures. Furthermore, general information (audience levels, broadcast news, financial results, etc.), is regularly sent to all staff by . As each employee has access to confidential information during his/her work, which may or may not concern NRJ GROUP, he/she is subject to an obligation of confidentiality towards third parties and other group members who are not authorised to know about this information. Furthermore, in accordance with the provisions of Article L et seq. of the Monetary and Financial Code and Articles et seq. of the General Regulations of the AMF (French Financial Markets Authority), employees who learn of inside information as part of their duties are, depending on their circumstances, entered on the name list of permanent insiders or that of occasional insiders. Entries and withdrawals on these lists are always announced to personnel concerned. Risk management procedures The risk management system is described above in the section 1) General principles for risk management. Control activities The Company attaches particular importance to the processes defined and implemented by the different functional services and departments that oversee the Company and/or assist the Group's different entities in their areas of competence. The functional services and departments disseminate transversal procedures and monitor their correct application. Legal department The Legal Department defines and organises the Group's legal policy through the network of internal lawyers or external service-providers that it supervises. All special proceedings relative to the life of the direct or indirect subsidiaries of the Group are subject to the approval of the Group's Chairman and Chief Executive Officer, assisted by the Legal Department and the Deputy General Manager. The Legal Department writes most contracts and systematically writes those that are the most important, and suggests modifications to drafts submitted by third parties. The Legal Department informs the Chairman and Chief Executive Officer, the Deputy General Manager and operational staff of any legal issues related to current operations or changes to legislation, regulations or legal precedent. A tangible assessment of potential legal risks is made by the Legal Department, which informs the Chairman and Chief Executive Officer, the Deputy General Manager and operational staff, so that they can make appropriate decisions. Also, all preliminary procedures and disputes are monitored by the Legal Department, in close cooperation with law firms. Lastly, the Legal Department monitors the legal and regulatory situation, to identify and anticipate changes in legislation and regulations. Confidentiality 92

94 Company law department The company law department manages law-related issues for companies of the NRJ Group and its French subsidiaries, and monitors "corporate" information for foreign subsidiaries and investments. It also provides its expertise in the context of any proposed acquisition and disposal operations that may be studied by the Group. Human Resources Department Management of human resources is organised by country, where each subsidiary applies the local regulations in force, supported by the skills of specialists in the profession. The Head of Group Human Resources oversees coordination of the Group's social policy and its application by the French subsidiaries. The Human Resources Director also participates with the Chief Financial and International Business officer in the Human Resources committee, which meets each week around the Managing director of General management. The HR Committee intends to ensure strict compliance with the budgetary framework relating to personnel expenses. In collaboration with operational departments, it also participates in the debate on streamlining and optimising human resources, particularly by promoting internal mobility of employees within the Group. For the companies managed in Paris, the Group Human Resources Department: oversees the recruitment and training process, the preparation and follow-up of employment contracts and the management of disputes, sends the necessary information to the human resources manager responsible for payroll and social security declarations. There is a separate payroll and human resources department for the companies managed in Lyon. The Group Human Resources Division promotes the Group procedures for periodical employee appraisals within the subsidiaries, emphasizing quality and team motivation, and ensuring opportunities for the internal mobility of skills throughout the Group. Lastly, it manages relationships with the organisations representing personnel and management, oversees compliance with health and safety rules, prepares and implements the internal regulations, administers the personnel and monitors regulatory changes. Purchasing Department The Purchasing Department establishes and manages the Group's general purchasing conditions in France, excluding purchases of programmes, rights and usage charges. It references and assesses the performance of Group suppliers. It manages commercial negotiations and actively participates in contractual negotiations, in accordance with the specifications defined jointly with operational staff. Through its ongoing action on prices, the Purchasing Department contributes to improving the Group's economic performance. Since its creation, the purchasing department has worked on preparing and distributing a general purchasing procedure, and a table of commitment thresholds authorised according to the type and amount of transactions, established in close cooperation with senior management and the Group's Financial Department. Current transactions are undertaken by the managers of the departments in question, within their budgets. The procedures for committing to expenditure specify different levels of approval from the Financial Department, the Executive Directors, or even the Company's Board of Directors, according to the amounts committed. In this context, with the exception of certain categories of duly identified expenses, the monitoring of expenditure commitments and payment approvals is done using the integrated information system (SAP), where predefined circuits for electronic approval and validation (purchase workflow) have been prepared. The Group is engaged in a continuous-improvement process, in particular aiming to ensure the traceability of the validation process for all purchase flows. Moreover, the Group is pursuing a process of purchasecontract standardisation, aiming to guarantee continuity of service and to secure supplies and financial conditions. General Services Department This Department oversees the maintenance, protection and safeguard of the Group's people and its physical assets. Technical Services The technical services department, under the responsibility of the Executive Director, Technical Division, organises, plans, manages and maintains all the equipment necessary for the correct operation of the studios and the broadcasting of programmes according to the musical identity of each radio station. The technical services of the television division report directly to the TV channels department and pursue the same objectives. 93

95 Information Systems department The Information Systems Department is responsible for defining the Group's master plan in terms of the organisation and architecture of systems, and for defining short and medium-term objectives. In this respect, it coordinates and supervises all IT resources by controlling the investment and operating budget of the Group and its French subsidiaries. In France, this department manages all information systems (office software, network architecture and servers, applications, security, etc.), implements subsidiaries' and departments' projects and software development, and installs systems for backing up computerised data, making sure that they are effective. Permanent monitoring of the system In addition to the controls made by the different operating and functional departments, the internal audit system is subject to controls and assessments by parties which are independent from operations. Internal Audit Department Other than its active role in the risk management process, the internal audit department, composed of a manager and an internal auditor, ensures compliance with all Group policies, rules and procedures, checking the efficiency of processes and detecting any potential fraud. It conducts independent and objective advisory and audit activities to improve the pertinence and efficiency of internal audit systems. It hence contributes to the identification and reduction of risks, the safeguard of assets and the improvement of controls within the group. The audit plan for the current year and the progress report on the work of the previous year are reviewed at the start of each year by the Audit Committee. During this committee meeting, from their work the Auditors make recommendations on the review of the Group s internal audit system. As part of the annual audit plan and ad hoc assignments carried out on request from the senior management, the internal audit department also carries out compliance audits, concerning both processes and subsidiaries. Follow-up audits are generally made within twelve months with the aim of ensuring the proper implementation of the recommendations and action plans recommended. The internal-audit department also supervises the process of self-evaluation of internal audit within the main entities/subsidiaries of the Group. The benefits of this annual process are firstly to improve the control and efficiency of operations under an ongoingprogress approach and, secondly, to involve the managers and staff of the Group in monitoring the system for auditing and controlling risks. The chosen methodology is based on distributing selfassessment questionnaires concerning 11 financial and operational cycles. Those answering the questionnaire establish the action plans relating to the areas for improvement identified by completing the document. These action plans are monitored on a multi-annual basis. The Board of Directors is assisted by two specialised committees, the audit committee and the appointments and remuneration committee. The tasks and composition of these two committees are specified in paragraph I-1.3 of this report. External audit In the exercise of their mandates, the company's independent auditors periodically review the internal audit procedures established within the Group. In this context, they hold regular discussions with the internal audit department and once a year they present the conclusions of their work to the audit committee. In application of article L of the French Commercial Code, the independent auditors establish a report on the information concerning the internal audit and risk management procedures relative to the preparation and processing of accounting and financial information. 4) INTERNAL AUDIT RELATING TO THE DRAFT- ING AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION In addition to the company's general system for internal audit presented above, which contributes to the conformity and reliability of accounting and financial information, the specific system for accounting and financial internal audit is based on the following components: - an organisation, - financial information systems, - control activities aiming to ensure the reliability of published accounting and financial information. Organisation The Group s Financial Department is led by the Managing director for Finance and International business. In particular, the Financial Department ensures compliance with accounting, fiscal and stock-market rules relating to corporate law and is responsible for the processing of financial and accounting information. Accounting Services Accounting is centralised by the Group Accounting Division for almost all of the French entities that are majority controlled, with the exception of that of the technical broadcasting subsidiary, towercast SAS, the local advertising entity, Régie Networks SAS, and NTCA Productions SAS, which is the producer of the musical "1789 Les Amants de la Bastille". These three companies have their own accounting departments. Internationally, the production of accounting information is organised either by region: Germany/Austria, Scandinavia (Norway/Sweden), or by country: Belgium, Switzerland and Finland. Treasury department The treasury department provides day-to-day management of centralised cash for the French subsidiaries and monitors investments. It also centrally monitors banking relationships for the wholly-owned French subsidiaries. Specialist committees within the Board of directors 94

96 Group management control and consolidation departments The Group consolidation and management control departments ensure: the coherence of information sent from subsidiaries before aggregating results and consolidating entries, and check the coherence of restatements that are made. In this regard, financial information sent by the subsidiaries included in the consolidation scope is now established according to a unique Group chart of accounts. The accounting managers of all of the Group's Frenchspeaking entities use a consolidation manual that describes the accounting principles used by the Group to establish its consolidated accounts. This manual was prepared and deployed to help, when necessary, with: - the harmonisation of the accounting principles used within the Group, - the identification of any significant accounting differences related to the specifics of the activity of the entity concerned, or the local regulations, and requiring central restatement, - input into the consolidation package of all financial data required by the Group to establish the notes to the consolidated financial statements. At the end of 2012, the consolidation manual was adapted and translated before being distributed to all of the Group's international German-speaking entities. The financial managers of subsidiaries are responsible for the compliance of transmitted financial information with the chart of accounts and the accounting principles of the Group, and for compliance with the detailed instructions sent by the consolidation department, particularly concerning the timetable for reporting information. Financial departments of subsidiaries In France, each business division has an Administrative and Financial Manager. Their role consists of checking the correct operation of the division at administrative and financial level, and acting as an interface with the Group's central financial services. Internationally, the financial services are organised in a similar manner to the accounting services. Financial information systems Unconsolidated financial statements All of the French subsidiaries, excluding musical productions and sound tracking, use the same integrated information system (SAP). The main functionalities developed notably concern purchases, media sales and accountancy/finance. The integrated SAP information system enables better visibility and enhanced control over a significant share of the Group s sales and recurring operating expenses. It thereby contributes to the Group s internal audit process, particularly in the following areas: - access control, - uniqueness of database, - data reliability, - traceability of data in terms of integration, - processes and document flows, - access to information in real time, - approval of commitments, - optimisation of contract management and invoicing. Statutory and management consolidation The Group produces its statutory and management consolidation in a unified reporting and consolidation tool: Hyperion Financial Management (HFM). Control activities aiming to ensure the reliability of published accounting and financial information Process for drafting and consolidating accounts General context The Group Accounting Department and Consolidation Department regularly inform employees concerned about changes in accounting rules and policies that are applicable to the preparation of the Group s individual and consolidated accounts. The same applies to changes in tax regulations that are applicable to the different tax returns that are established by the Company or its subsidiaries. For each accounting closure, the main accounting options are presented for approval to the Statutory Auditors and are then presented to the Audit Committee. Unconsolidated financial statements All subsidiaries prepare a monthly management statement and a quarterly accounting close. These statements are the basis for monthly reporting, including items of information relating to major discrepancies relative to the budget or the previous year and are communicated to the Group s management control department. Consolidated financial statements The Consolidation Department prepares quarterly consolidated accounts for internal use, consolidated condensed interim accounts and annual consolidated accounts. To do this, in advance it develops and communicates the instructions and detailed schedule to the Group s different entities and auditors. 95

97 Pursuant to European Regulation No. 1606/2002 dated 19 July 2002, NRJ Group has been preparing its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) since 1 January Procedures for inventory and monitoring of offbalance sheet commitments On a regular basis the Group ensures the evolution of Off-balance sheet commitments of its subsidiaries. In particular, this control is conducted as part of the statutory consolidation process, since subsidiaries are required to specify a list of their commercial and financial commitments and monitor them regularly. Audit process The condensed half-yearly consolidated financial statements and the annual consolidated financial statements established by the executive director finance are approved by the board of directors after examination by the audit committee, to whom the conclusions of the work of the independent auditors was presented. The draft financial statement is reviewed by the Audit Committee and then is validated by the Board of Directors before dissemination. Management process of external financial reporting Besides the CEO, only persons who are duly authorised to that effect shall be entitled to diffuse financial information outside the Company concerning the Group and its strategy. In particular, these include the Managing Director in the Directorate General, the Deputy Managing Director Finance and the Director of Investor Relations. The Department of Investor Relations disseminates regulatory information and strives to increase the visibility and legibility by third parties of information and operations of a financial nature concerning the Group. It also sets out a timetable for dissemination to the public of financial information concerning the Group and its strategy. This schedule is communicated internally. The Director of Investor Relations checks with the assistance of the Head of Corporate Activities, who is in charge of the Company Law department, ensuring this schedule complies with market requirements and AMF regulations. The director of Investor Relations and Head of Corporate Activities for the Group also ensure that the disclosure of financial information is made in a timely manner and in accordance with the laws and regulations, over which they together ensure a continuous watch. In this framework, financial information on NRJ GROUP and its strategy are mainly communicated to the public through: interim and annual financial reports, registration document, Presentation for the Annual General Meeting. These documents, which are drafted according to data and information that is produced and communicated by the different subsidiaries and support services of NRJ GROUP are subject to a control and validation process that particularly involves the board's executive director, the managing director, the executive director finance, the company law department, the human resources department and, in some cases, the board of directors. The Group s Registration Document is filed with the AMF, in accordance with its general rules. Prior to this filing, the registration document is subject to checks by the auditors, which consists of checking compatibility of information relating to the Group s financial situation and accounts with historical financial information, in addition to an overview of the said document. In order to guarantee investors equality of access to information, different communication media are also available in English, where applicable, and are diffused as follows: the information communicated for an external audience is, where appropriate, distributed by an AMFapproved distributor (statutory information) and put online at bearing in mind that any person wishing to receive this information by post may request it from the investor relations department, which will provide it free of charge, Results presentations intended for financial analysts and investors are put on line at 5) FORECASTS The company's systems for risk management and internal audit form part of a continuous improvement process. In this context, the main projects which are ongoing or planned for 2013 are as follows: i. Core businesses in France: update of the risk map established in 2011 relating to the radio and television activities. ii. International radio activities: update of the risk map, implementing the methodology established in 2011 for the core businesses in France. iii. TV division: continued reinforcement of specific internal control processes to take account of the development of this division. iv. All activities: continued standardisation of key operating procedures. The Chairman of the Board of Directors Jean-Paul Baudecroux financial press releases, whether these are periodical, namely those relating to quarterly information and interim and annual results, or specific, such as that published on the occurrence of particular events that are important, such as acquisitions or disinvestments, presentations of results for financial analysts and investors, 96

98 5.5 REPORT BY THE INDEPENDENT AUDITORS ESTABLISHED IN AP- PLICATION OF ARTICLE L OF THE COMMERCIAL CODE ON THE REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF NRJ GROUP Dear Shareholders, In our capacity as independent auditors of NRJ GROUP and in application of the provisions of article L of the French Commercial Code, we present our report on the report established by the chairman of your company in accordance with the clauses of Article L of the French Commercial Code for the year ending 31 December It is the responsibility of the Chairman to establish, and submit for the approval of the Board of Directors, a report giving an account of the procedures for internal audit and risk management put in place within the company and providing the other information required by Article L of the French Commercial Code, particularly in relation to measures concerning corporate governance. It is our responsibility: - to inform you of our observations on the information contained in the Chairman's report concerning procedures for internal audit and risk management relative to the preparation and processing of accounting and financial information, and - to certify that the report contains the other information required by Article L of the French Commercial Code, bearing in mind that it is not our responsibility to check that this other information is correct. We have carried out our work in accordance with professional standards applicable in France. Information concerning the procedures for internal audit and risk management relative to the preparation and processing of accounting and financial information Professional standards require the implementation of checks to assess the correctness of information concerning the procedures for internal audit and risk management relative to the preparation and processing of accounting and financial information contained in the Chairman's report. In particular, these checks consist of: - examining the procedures for internal audit and risk management relative to the preparation and processing of the accounting and financial information underlying the information given in the Chairman's report and the existing documentation; - examining the work leading to the preparation of this information and examining the existing documentation; - determining whether any major deficiencies in internal audit concerning the preparation and processing of accounting and financial information that we may have noted during our assignment are the subject of appropriate information in the Chairman's report. On the basis of this work, we have no observation to make on the information concerning the company's internal audit and risk-management procedures relating to the preparation and processing of accounting and financial information contained in the report of the Chairman of the Board of Directors, established in application of the clauses of Article L of the French Commercial Code. Other information We certify that the report by the Chairman of the Board of Directors contains the other information required by Article L of the French Commercial Code. Neuilly-sur-Seine, 28 March 2013 The Independent Auditors PricewaterhouseCoopers Audit Laurent DANIEL Deloitte & Associés Bertrand BOISSELIER 97

99 6 GENERAL INFORMATION CONCERNING NRJ GROUP AND ITS SHARE CAPITAL 6.1 ARTICLES OF ASSOCIATION AND OPERATIONS Company name and registered office NRJ GROUP - 22 rue Boileau, Paris, France Tel: Entry in the Trade and Companies Registry and APE (business sector) code NRJ Group is registered in the Paris Trade and Companies Registry under SIREN registration number Its business sector code is 7010 Z (Head office operations). Legal form and governing legislation Limited company with board of directors incorporated under French law governed by the commercial code. Duration of Company, Fiscal year, Appropriation of results and consultation of corporate papers The Company was established with a term of 99 years, starting from 25 March 1985 and expiring on 25 March 2084, except in the event of early dissolution or extension as provided for in the Articles of Association. Corporate purpose (Article 3 of the Articles of Association) "The Company s purpose is: the acquisition and operation of interests in any company involved in radio, television, multimedia and/or internet businesses; the use of manufacturers' marks, trademarks and service marks; the participation in any French or foreign firms, economic interest groupings or companies, existing or to be created, that may relate directly or indirectly to the Company's purpose or to any similar or connected purposes, especially firms, groupings or companies whose corporate purpose may contribute to the achievement of the Company's purpose. This participation may take any form, in particular the contribution, subscription or purchase of shares, mergers, joint stock companies, or general or limited partnerships; the participation in general in any commercial, manufacturing, financial, movable or real property operations that may relate directly or indirectly to the Company's purpose or any similar or related purpose that could facilitate growth and development". Consultation of the legal documents relating to the Company The legal documents relating to the Company, such as the Articles of Association or the minutes of General Meetings, may be consulted at the Company's registered office or administrative headquarters. "The Company s financial year starts on 1 January and ends on 31 December of each year". Appropriation of income (Article 19 of the Articles of Association) "The profit or loss for the financial year shall consist of the difference between the revenues and the costs for the financial year after deducting impairments, amortisations and provisions. Five per cent of the profit for the year, less any previous losses, shall be transferred to the legal reserves fund. This deduction shall no longer be obligatory when the reserve fund reaches one tenth of the equity capital. It shall resume if for any reason whatsoever the amount of the reserve falls below this one-tenth. The distributable profit shall consist of the profit for the financial year less any previous losses and the deduction provided for above, plus profit carried forward. This profit shall be made available to the General Meeting, which may, pursuant to a motion by the Board of Directors, in part or in full, carry it forward, allocate it to general or special reserve funds or distribute it to the shareholders in the form of a dividend. The General Meeting may also decide to distribute sums deducted from the reserves at its disposal. In this case, it shall clearly indicate the reserve items from which these sums are to be deducted. However, in priority, the dividend is paid from the distributable profit for the year. The revaluation difference is not distributable. It may be partially or fully capitalised. The Meeting has the power to grant to each shareholder, for all or part of the dividend or interim dividend distributed, an option between payments in cash, by delivery of goods in kind, or in equity, dividends or interim dividends". Board of directors (Article 13 of the Articles of Association) Composition "The Company shall be managed by a Board of Directors consisting of at least three members and no more than eighteen members. This number may be exceeded in the cases and in accordance with the conditions and limits determined by the legal provisions. Unless exempted from this requirement by law, each Director must own at least one share in the Company". Financial year (Article 18 of the Articles of Association) 98

100 Term of office age limit "Directors are appointed for a two-year term of office running through to the end of the shareholders' Ordinary General Meeting called to approve the financial statements for the previous year and held during the year in which the Director's term of office expires. Any outgoing Director may be re-appointed. No more than one third of the members of the Board of Directors may be 80 years of age or more. If this limit is exceeded, the oldest Director shall be deemed to have resigned automatically". Chairman of the Board The Board shall elect a Chairman from among its members, who must be an individual. The Board of Directors shall set his remuneration. The age limit for the Chairman of the Board is set at 80 years. The Chairman shall organise and direct the Board of Directors work, and report on it to the General Meeting. He shall monitor the performance of the Company s managing bodies and shall in particular ensure that the Directors are capable of performing their tasks. If it deems it appropriate, the Board may appoint one or more Deputy Chairmen, whose roles shall consist exclusively of chairing the Board s and the shareholders meetings in the absence of the Chairman". The Board s deliberations The Board of Directors shall meet as often as the Company s interests require. It shall be convened on the initiative of the Chairman and, if he is not the Chief Executive Officer, at the request of the Chief Executive Officer or, if the Board has not met for more than two months, at the request of at least one third of the Directors. Invitations shall be sent by any means. They shall include the meeting agenda, drawn up by the person who convened the meeting. Meetings shall be held either at the Company s registered office or at another location stated in the invitation. The Board may deliberate validly only if at least half of its members are present. The internal regulations may provide that when calculating the quorum and majority, Directors taking part in the meeting via videoconferencing or telecommunication media shall be deemed to be present, within the limits and under the terms and conditions determined by current legislation and regulations. Decisions shall be taken by majority of the votes of the members present or represented, each Director present or represented having one vote and each Director present having only a single power. In the event of a tie, the vote of the meeting s Chairman shall prevail". The Board s powers "The Board of Directors shall set guidelines for the Company s activities and shall monitor their implementation. Subject to the powers expressly granted at Annual General Meetings and within the limit of the corporate purpose, it considers all matters relating to the correct operation of the Company and settles business relating to the Company through its discussions. It shall carry out any inspections and checks that it deems appropriate. In addition to the capacities that the Board holds by law, if the role of Chief Executive Officer is not assumed by the Chairman of the Board of Directors, the Chief Executive Officer must obtain prior approval from the Chairman for any operations likely to alter the Company s financial structure and/or area of operation, and in particular: i) the sale, exchange or contribution of a participating interest, a manufacturer s mark, a business or a building, ii) concluding loan agreements on the Company s behalf other than for its current requirements, iii) granting sureties, iv) participating in the formation of any company, or the contribution of all or part of the Company s assets to a company that has been or is to be formed, v) the approval or modification of the budget, vi) making unbudgeted investments which individually or cumulatively amount to more than 1,500,000 million, vii) amending the terms of the NRJ brand franchise agreement concluded with the company NRJ, viii) in general, any significant reorganisation or restructuring of the Company". Remuneration "The General Meeting may award the members of the Board of Directors a fixed annual sum as directors fees. The Board shall allocate this remuneration among its members at its own discretion. It may also award certain Board members exceptional remuneration for assignments and tasks entrusted to them". Executive management (Article 14 of the Articles of Association) "The executive management of the Company shall be the responsibility of either the Chairman of the Board of Directors or another individual chosen from within or outside the members of the Board, known as the Chief Executive Officer. The Board of Directors shall choose between the two methods for exercising executive management. It may revise its choice at any time. In each case, it shall inform the shareholders and third parties in accordance with current regulations. If the Chairman is also the Chief Executive Officer, the provisions hereof relating to the Chief Executive Officer shall apply to the Chairman. When the general management is not assumed by the Chairman of the Board of Directors, the Board of Direc- 99

101 tors appoints a Chief Executive Officer, to whom applies the age limit set for the role of Chairman. The Board of Directors may remove the Chief Executive Officer at any time. If such removal is decided without due cause, compensation may be payable, except where the Chief Executive Officer has assumed the role of Chairman of the Board of Directors. The Chief Executive Officer shall be vested with the broadest powers to act on the Company s behalf in any circumstances. He shall exercise these powers within the scope of the corporate purpose and subject to those powers that the law or the Articles of Association expressly attribute to the shareholders meetings and to the Board of Directors. He shall commit the Company even through his actions that do not form part of the corporate purpose, unless the Company proves that the third party concerned knew that this action exceeded the scope of the corporate purpose or could not have been unaware of this fact in the circumstances. He shall represent the Company in its dealings with other parties, which shall not be bound by any decisions limiting his powers. Pursuant to a motion by the Chief Executive Officer, the Board of Directors may appoint one or more Deputy Chief Executive Officers, up to a maximum of five. The Deputy Chief Executive Officer(s) may be chosen from the members of the Board or from outside the Board. They may be removed at any time by the Board of Directors pursuant to a motion by the Chief Executive Officer. If such removal was carried out without due grounds, compensation may be payable. If the Chief Executive Officer ceases to hold or is unfit for office, unless the Board decides otherwise, the Deputy Chief Executive Officer(s) shall remain in office and shall retain his/their capacities until a new Chief Executive Officer has been appointed. By agreement with the Chief Executive Officer, the Board of Directors shall set the scope and term of the powers granted to the Deputy Chief Executive Officers. The Deputy Chief Executive Officers shall be bound by the same limitations of powers as the Chief Executive Officer and shall have the same powers as the Chief Executive Officer vis-à-vis third parties. The Board shall set the amount and the terms of the remuneration paid to the Chief Executive Officer and the Deputy Chief Executive Officer(s)". Observers (Article 15 of the Articles of Association) "The Board of Directors may appoint one or more individuals or legal entities as observers, chosen from within or outside the body of shareholders. The number of observers shall not exceed five. Their term of office is two years. An observer's term of office shall terminate at the end of the General Meeting called to approve the financial statements for the previous year and held during the year in which the observer's term of office expires. Observers may be re-elected indefinitely, and may be removed at any time without compensation by decision of the Board of Directors. The observers shall attend the Board s meetings in an advisory capacity. Their right to information and communication is the same as the Directors. They shall be bound by the same obligations of confidentiality as the Directors. If the Board of Directors so decides, they may receive remuneration drawn from the amount of the attendance fees attributed to the Directors. The observers responsibility is to monitor the application of the Articles of Association. They may advise on any point mentioned on the Board s agenda, and may ask the Chairman to inform the General Meeting of their opinion when they consider it appropriate". General Meetings (Extract from Article 16 of the Articles of Association) Shareholders meetings shall be convened and shall deliberate under the terms and conditions provided for by the law and in the regulations. They shall be held at the Company s registered office, or at any other location in the same department. The right to take part in General Meetings is subject to registration of the securities in the name of the shareholder, or the intermediary registered on his behalf, no later than midnight, Paris time, on the third business day before the meeting, either on the registered securities accounts kept by the Company or on the bearer securities accounts kept by the authorised intermediary ( )''. Double voting rights (Extract from Article 10 of the Articles of Association) (.) Fully paid-up shares that have been proven to have been registered for two years in the name of the same shareholder shall have a double voting right (.). Identity of the holders of securities (Article 11 of the Articles of Association) "The Company shall be entitled to ask the central depository that keeps the issuing account for its securities, at any time and at its own expense, for the name or company name, date of birth or date of establishment, address and nationality of the holders of securities that confer a voting right immediately or in the future at its own shareholders meetings, together with the number of shares held by each and any restrictions by which the shares may be encumbered". Breach of the limit on shareholdings (Article 12 of the Articles of Association) Any individual or legal entity that comes to hold or ceases to hold a portion of the share capital or of the voting rights in the Company of at least zero point five percent (0.5%) shall be required to inform the Company of the total number of shares in the Company that he or it holds directly or indirectly, within five (5) stock market trading days from the date this shareholding limit is breached. This notification must be renewed under the terms and conditions provided for above each time a new threshold of 0.5% is breached. If they have not been properly disclosed under the terms and conditions provided for above, the shares that exceed the fraction that should have been disclosed shall lose their voting right at any shareholders meetings held up to two years after the date on which the notification is 100

102 duly carried out, solely on request recorded in the minutes of the General Meeting by one or more shareholders who hold at least 5% of the share capital or voting rights". Transfer of shares, collateralisation of financial instruments accounts There are no clauses that restrict the transfer of shares. 6.2 CAPITAL AND VOTING RIGHTS CAPITAL On the publication date of this registration document, the Company's share capital amounted to 810,815.35, divided into 81,081,535 ordinary shares with a par value of 0.01 each. Changes in the share capital since the establishment of NRJ Group Date Nature of operation Amount of changes in the share capital Number of shares Company established 2, Conversion of the share capital into euros Share capital increased by raising the par value New shares created by dividing the par value by Share capital increased through a contribution in kind Share capital increased by issuing new shares as consideration for the shares tendered to the simplified public exchange offer ( OPES ) Share capital increased by issuing new shares as consideration for the public offer of withdrawal by exchange of shares ( OPREA ) Share capital reduced by cancelling shares acquired through the share buyback programme Share capital reduced by cancelling shares acquired through the share buyback programme Share capital reduced by cancelling shares acquired through the share buyback programme Share issues/cancellations Par value 100 French francs Issue premiums Amount of share capital after operation Total number of shares francs 2, euros euros 2, euros euros 2,500 39,372, euros 39,375, ,100 36,092,785 euros euros 40,071,100 44,550,813 1,858,791 1,610,425, euros 91,039, euros 846, euros 84,621, , euros 86,480, , , euros 86,193,004 3,106, , euros 83,086,030 2,004, , euros 81,081,

103 6.2.2 AUTHORISATIONS RELATING TO INCREASES IN THE SHARE CAPITAL AND OTHER APPROVALS Authorisations currently in effect Reduction of share capital by cancelling shares held by the Company Grant of share purchase or subscription options Issue of shares by incorporation of reserves, profits or premiums Issue (with pre-emptive subscription rights maintained) of shares or other securities giving rights to the share capital of the Company, or of a company over which it has a controlling interest of more than 50% or entitling it to the allocation of debt securities Issue (with abolition of preferential subscription rights by public offer) of shares or securities giving rights to the share capital of the company, or of a company over which it has a controlling interest of more than 50% or entitling it to the allocation of debt securities Issue (with pre-emptive subscription rights waived) of shares or other securities giving rights to the share capital of the Company, or of a company over which it has a controlling interest of more than 50% or entitling it to the allocation of debt securities Increase in the number of securities to be issued in the event of a rights issue, with or without pre-emptive subscription rights Purchase by the Company of its own shares Issue of shares or other securities giving rights to the Company s share capital, as consideration for shares or other securities tendered Date of general meeting Duration 10/05/ months 10% of capital Maximum amount authorised or overall cap Use of authorisations during the 2012 financial year 29/08/2012: Cancellation of 2,004,495 shares Residual amount at 31/12/ % of capital 12/05/ months 2% of capital NA 2% of capital 10/05/ months 10/05/ months 10/05/ months 10/05/ months 10/05/ months Maximum nominal amount of shares: 415,430 Maximum nominal amount: - shares: 168,000 - other securities: 100,000,000 Maximum nominal amount 1 : - shares: 84,000 - other securities: 100,000,000 Maximum nominal amount 2 : - shares: 84,000 within the limit of 20% of the capital - other securities: 100,000,000 15% of the initial issue, up to the limit of the authorisation ceiling 10/05/ months 10% of capital NA NA NA NA NA Purchase of 331,015 shares Maximum nominal amount of shares: 415,430 Maximum nominal amount: - shares: 168,000 - other securities: 100,000,000 Maximum nominal amount 1 : - shares: 84,000 - other securities: 100,000,000 Maximum nominal amount 2 : - shares: 84,000 - other securities: 100,000,000 15% of the initial issue, up to the limit of the authorisation ceiling 9.6% of capital 10/05/ months 10% of capital NA 10% of capital 1 - With allocation of any issues of shares without pre-emptive subscription rights through a private placement against this ceiling 2 - With allocation of any issues of shares without pre-emptive subscription rights through a public offering against this ceiling POTENTIAL SHARE CAPITAL NRJ Group has not issued any dilutive financial instruments VOTING RIGHTS Article 10 of the Articles of Association (see 6.1, Articles of Association and Operations ) states that fully paid-up shares that are proven to have been registered for two years in the name of the same shareholder shall have a double voting right (Extraordinary General Meetings of 27 April 2000 and 13 September 2001). In the event of an increase in the share capital by capitalisation of reserves, profits or issue premiums, the double voting right may also be conferred, immediately on issue, to registered shares allocated free of charge to a shareholder in respect of old shares for which he enjoys this right. However, this double voting right ceases to apply to any shares converted into bearer shares or transferred to another person, subject to the exceptions provided for by law (e.g. registered shares transferred to another registered account through inheritance or as a gift from a relative). It is also stated that if the shares have not been properly disclosed under the terms and conditions provided for in Article 12 of the Articles of Association*, the shares that exceed the fraction that should have been disclosed shall lose their voting right at any shareholders meetings held up to two years after the date on which the notification is duly carried out, solely on request recorded in the minutes of the General Meeting by one or more shareholders who hold at least 5% of the share capital or voting rights". * see 6.1 Articles of Association and Operations: "Any individual or legal entity that comes to hold or ceases to hold a portion of the share capital or of the voting rights in the Company of at least zero point five percent (0.5%) shall be required to inform the Company of the total number of shares in the Company that he or it holds directly or indirectly, within five (5) stock market trading days from the date this shareholding limit is breached. This notification must be renewed under the terms and conditions provided for above each time a new threshold of 0.5% is breached". 102

104 6.2.5 BREAKDOWN OF SHARE CAPITAL AND VOTING RIGHTS 31 December December December 2010 Share capital Voting rights Share capital Voting rights Share capital Voting rights Number % Number % Number % Number % Number % Number % Jean Paul BAUDECROUX 62,780, , ,780, ,941, ,780, ,941, Other members of the 2, , , , , Board of Directors (1) Treasury stock 1 500, , ,504, Other shareholders , , , , , , TOTAL 81,081, , ,086, , ,086, , (1) At 31 December 2012: Antoine GISCARD d ESTAING: 1,400 shares and 2,800 voting rights; Maryam SALEHI: 5 shares and 10 voting rights; François MAZON: 1,001 shares and 1,002 voting rights; Vibeke RÖSTORP: 1 share and 2 voting rights; Muriel SZTAJMAN: 2 shares and 4 voting rights This breakdown in the share capital had not changed significantly on the registration date of this registration document. Information on breaches of thresholds No legal thresholds were breached during the last three years. In compliance with the provisions of Article L of the French Commercial Code, the identities of the individuals and legal entities that hold, either directly or indirectly, more than 5%, 10%, 15%, 20%, 25%, 33.33%, 50%, 66.66%, 90% and 95% of the Company's share capital or voting rights at General Meetings are stated below: At 31 December 2012, Mr Jean-Paul Baudecroux held 62,780,838 of the 81,081,535 shares comprising the equity capital, i.e % of the Company's share capital and 86.09% of its voting rights. To the best of the Company's knowledge, no other shareholder holds, either directly or indirectly, more than 5% of the share capital or voting rights. There was no change to the list of persons holding investments greater than the thresholds indicated above during the 2012 financial year. Corporate officer securities transactions Surname and first name Offices within the issuer Description of financial instrument Acquisitions of financial instruments: Total number of financial instruments purchased Unit price Total amount of acquisitions MAZON François Director Shares 1, ,400 Information about measures taken to prevent the abusive exercise of control of the Company The Company is controlled as described in the above table. Apart from the appointment of independent directors on the Board of Directors, the introduction of specialist committees, and the prevailing legal provisions, no specific measures have been taken to prevent the abusive exercise of control of the Company. Information that may prove significant in the event of a public offer In accordance with Article L of the French commercial code, the points that are likely to have an impact in the event of a public offering are presented below: Share ownership structure: information regarding the share ownership structure of NRJ Group is shown in the table above. Statutory restrictions on the exercise of voting rights: There is no statutory restriction on the exercising of voting rights, excluding the statutory sanction of deprival of voting rights during a period of 2 years following the settlement of the notification, which is likely to be requested by one or more shareholders who hold at least 5% of the capital or voting rights in the event of non-compliance with the statutory obligation of declaring breaking the threshold of 0.5% of capital or voting rights, or of any multiple of this percentage regarding shares exceeding the fraction that should 103

105 have been declared (see Article 12 of the Articles of Association). In addition, there are no statutory restrictions concerning transfers of Company shares. Direct or indirect participating interests in the Company of which it is aware: the corresponding information is presented in To the best of the Company s knowledge, no agreement or other commitment has been concluded between the shareholders. There are no securities including special rights of control. However, it is specified that there is a double voting right for all shares that are fully paid up for which a nominative inscription has been proven for the past two years in the name of the same shareholder (see Article 10 of the Articles of Association). There are no control mechanisms provided for in any employee shareholder schemes with controlling rights that are not exercised by the employees. The rules for appointing and removing members of the Board of Directors are those provided for by law and those stated in the Articles of Association. Devolution of powers to the Board of Directors: the corresponding information is given in The Company s Articles of Association are amended in accordance with the legal and regulatory provisions. Concerning agreements concluded by the company that would be modified or would terminate in case of change of control of the company, it would be difficult for the Company to predict with any certainty the impact on its contracts of any change of control. No specific provisions have been agreed concerning compensation in the event of the removal from office of members of the Board of Directors. Employee shareholdings At 31 December 2012, the mutual fund (fonds commun de placement), in which employee profit-sharing payments by the Company are invested under the group-wide agreement, held 3,000 NRJ GROUP shares, representing 0.004% of the capital SHARE BUYBACKS DESCRIPTION OF THE SHARE BUYBACK PROGRAMME Pursuant to the provisions of Article of the AMF s General Regulation, and European Regulation no 2273/2003 of 22 December 2003, the purpose of this description is to set out the objectives and the terms and conditions of the NRJ GROUP s share buyback programme. This programme will be submitted to the General Meeting on 28 May 2013 for approval. BREAKDOWN OF SECURITIES HELD ON 28 FEBRUARY 2013 BY OBJECTIVE: Number of shares held directly and indirectly: 1,507,228, representing 1.86% of the Company's share capital. Number of securities held, broken down by objective: To support the share price through an AMAFI liquidity contract: 7,228 For acquisitions: 0 To cover stock options or other employee shareholding schemes: 1,500,000 To cover securities granting entitlement to share allocations: 0 For cancellation: 0 NEW SHARE BUYBACK PROGRAMME Approval of the programme: General Meeting on 28 May 2013 Type of securities concerned: ordinary shares Maximum proportion of the share capital authorised for buyback: 10% (currently equivalent to 8,108,153 shares). Given the number of shares held by the Company (1,507,228 representing 1.86% of the capital), the Company may only purchase 6,600,925 shares (representing 8.14% of the capital) unless it cancels or disposes of treasury shares. Maximum purchase price: 15 per share Terms and conditions of buybacks: the shares may be purchased by any means and at any time, including during a public offering period, but in strict compliance with applicable stock market regulations. The Company reserves the right to use options and derivative instruments in accordance with applicable regulations. Objectives: o Stimulating the secondary market or ensuring that liquidity is provided for NRJ GROUP shares by an investment services provider under a liquidity agreement that complies with the AMAFI (French Financial Markets Association) Code of Conduct approved by the AMF (French Financial Markets Authority); o Holding the shares purchased for the purpose of subsequently exchanging them or using them as consideration for potential acquisitions, in which case the number of shares purchased for this purpose may not exceed 5% of the Company's share capital; o Covering stock option plans and/or bonus share plans (or related plans) for the Group's employees and/or corporate officers, in addition to all allocations of shares in connection with a company or group savings scheme 104

106 (or related scheme), employee profit-sharing arrangements and/or all other forms of share-based awards to the Group's employees and/or corporate officers, o Covering options and other securities granting rights to the Company s shares, in accordance with applicable regulations, o Cancelling the shares purchased, if required, in accordance with the authorisation granted by the Combined Annual General Meeting of 10 May 2012 under the thirteenth extraordinary resolution. Duration of the programme: 18 months from the General Meeting of 28 May 2013, i.e. 27 November PURCHASES AND SALES OF THE COMPANY'S OWN SHARES DURING THE 2012 FINANCIAL YEAR During the last financial year, the Company carried out the following purchases and sales of its own shares as part of its share buyback programme: Transactions carried out independently of the liquidity contract Transactions carried under the liquidity contract Shares purchased Shares sold Shares purchased Shares sold Number of shares , ,001 Average price Trading expenses Reason for purchase Total number of shares purchased during the financial year % of the share capital allocated to this objective Number of shares used Share price support 331, % - Employee shareholding Transferable securities granting entitlement to share allocations External growth operations Cancellation Volume of shares used for each objective during the financial year: Employee Coverage of External growth Cancellation shareholding securities operations Volume of shares used (in number of shares) ,004,495 Reallocations carried out during the financial year: by resolution of the Board of Directors on 29 August 2012, it was decided to reallocate for cancellation 2,004,495 shares initially allocated for external growth, with these shares subsequently cancelled by resolution of the same Board meeting. Number of shares registered in the name of the Company at the end of the financial year (shares acquired through the share buyback programme, including purchases made during previous programmes): 1,500,025, equating to 1.85% of the share capital. Book value (acquisition price): 10,738,640. Nominal value: 15, PURE REGISTERED SHARES PLEDGED AS COLLATERAL To the best knowledge of the Company, at 31 December 2012, 84,500 'pure registered' (nominatif pur) shares belonging to a single shareholder were pledged as collateral. 105

107 6.3 MARKET FOR NRJ GROUP SHARES EXCHANGE LISTING AND SHARE PRICE MOVEMENTS NRJ GROUP shares are listed on Compartment B of the Euronext Paris market, under ISIN Code FR Index Weight in index CAC ALL-TRADABLE 0.01% CAC ALL SHARES 0.03% CAC MID&SMALL 0.15% CAC SMALL 0.87% CAC CONSUMER SERV. 0.34% CAC MEDIA 0.72% Source: Euronext (26 March 2013) 106

108 TRANSACTIONS SINCE 1 JANUARY 2008 Month Price range, in High Low (in session) Month s closing price, in Number of securities traded Amount of share capital traded, in 000s Market capitalisation at month-end, in 000s 2008 January ,716,418 12, ,397 February ,327,955 14, ,178 March ,116,807 12, ,618 April ,132,697 6, ,240 May ,011,352 18, ,017 June ,376,618 8, ,854 July ,133,813 7, ,582 August* ,698,724 12, ,104 September ,528,450 17, ,385 October ,082,006 13, ,886 November ,118,507 6, ,785 December ,736,499 9, , January ,457 2, ,434 February ,917 2, ,346 March ,227 1, ,973 April ,130 1, ,241 May** ,744 1, ,041 June ,431 1, ,967 July , ,151 August ,748 4, ,047 September ,277 5, ,905 October ,791 6, ,905 November ,610 1, ,979 December ,211 2, , January ,696 4, ,596 February ,828 1, ,207 March ,000 5, ,139 April ,318 4, ,991 May ,894 1, ,383 June ,076 2, ,362 July ,746 2, ,780 August , ,581 September ,378 3, ,602 October ,797 2, ,145 November ,586 4, ,837 December ,544 2, , January ,404 7, ,107 February ,617 4, ,305 March ,775 5, ,484 April ,114 4, ,350 May ,302 5, ,679 June ,727 6, ,570 July ,459 1, ,077 August ,228 2, ,558 September ,808 1, ,249 October ,037 1, ,234 November , ,389 December , ,

109 Month Price range, in Month's Number of Amount of Market High Low closing price, in securities traded share capital capitalisation at (in session) traded, in 000s month-end, in 000s 2012 January ,228 1, ,569 February ,042 2, ,442 March ,387 5, ,537 April ,905 3, ,700 May ,449 2, ,053 June ,319 1, ,202 July ,273 1, ,276 August ,875 2, ,893 September ,216 4, ,759 October ,155 1, ,002 November ,819 4, ,786 December ,883 3, , January ,626 1, ,787 February ,212 1, ,489 * following the cancellation of 287,700 shares by decision of the Board of Directors dated 27 August 2008, the number of shares composing the capital from this date was 86,193,004 (versus 86,480,704 previously). ** following the cancellation of 3,106,974 shares by decision of the Board of Directors dated 28 May 2009, the number of shares composing the capital from this date was 83,086,030 (versus 86,193,004 previously). *** following the cancellation of 2,004,495 shares by decision of the Board of Directors dated 29 August 2012, the number of shares composing the capital from this date was 81,081,535 (versus 83,086,030 previously). N.B. The historical data presented above does not take into account the restatements following the distribution of amounts deducted from the issue premium account in relation to 2009, 2010 and DIVIDENDS DIVIDENDS PAID IN RESPECT OF PREVIOUS FINANCIAL YEARS The amount of dividends paid in respect of the last five financial years (no other income was distributed during this period) is presented below: Financial year Income qualifying for tax allowance Income not eligible for tax allowance Dividends Other distributed income 31/12/ /12/ /12/ ,925,809 i.e per share* 24,925,809 i.e per share* 16,617,206 i.e per share* 31/12/2008 NA NA NA 345, /12/ i.e per share* * Including amounts not distributed due to treasury shares (allocated to retained earnings). 24,733,481,344 i.e per share* DIVIDEND POLICY Since its origin, NRJ GROUP has maintained a constant policy of dividends in the case of net profits. It intends to maintain this policy, in line with its capacity to distribute income and with a view to preserving the health and strength of its balance sheet. In view of the persistently difficult economic climate at the start of 2013, the Group considers that it needs to retain all its financial capabilities in order to secure its development on national television and broadcasting, while ensuring it is able to capitalise on any opportunities for external growth, including in its core radio business. As a result, the Board of Directors will be submitting a proposal at the general shareholders' meeting on 28 May to not pay out any dividend for It will also be submitting a proposal at the general meeting to authorise the implementation of a new share buyback programme. 108

110 7 NRJ GROUP CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2012 CONTENTS Page 7.1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED INCOME STATEMENT CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED CASH FLOW STATEMENT STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

111 7.1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (in 000s) Notes 31/12/ /12/2011 Intangible assets Goodwill Note 1 136, ,816 Other intangible assets Note 2 105, ,950 Property, plant and equipment Note 3 122, ,177 Non-current financial assets Note 4 10,339 7,090 Investments in associates Note 5 2,344 2,410 Deferred tax assets Note 13 5,036 5,202 Non-current assets 383, ,645 Inventories Note 6 60,345 59,543 Trade and other receivables Note 7 165, ,074 Current tax assets Note 14 3, Current financial assets 523 Cash and cash equivalents Note 8 84,763 95,072 Current assets 313, ,765 TOTAL CONSOLIDATED ASSETS 697, ,410 Share capital Share premiums 63,086 98,299 Consolidated reserves 396, ,323 Consolidated income (Group share) 37,099 45,560 Shareholders' equity (Group share) Note 9 497, ,013 Minority interests 957 (323) Shareholders equity 498, ,690 Non-current provisions Note 10 4,758 3,496 Financial liabilities relating to financing activities Note 11 1, Deferred tax liabilities Note 13 31,805 33,602 Non-current liabilities 38,409 37,772 Current provisions Note 10 11,275 13,137 Financial liabilities relating to financing activities Note Trade and other payables Note , ,280 Current tax liabilities Note 14 1,699 5,387 Current liabilities 160, ,948 TOTAL CONSOLIDATED LIABILITIES 697, ,

112 7.2 CONSOLIDATED INCOME STATEMENT (in 000s) Notes 31/12/ /12/2011 Revenues excluding dissimilar barters , ,452 Revenues from dissimilar barter transactions 4,355 5,225 Revenues 397, ,677 Other income from operations 10,313 10,790 Staff costs Note 15 (112,183) (113,456) External costs Note 16 (158,602) (149,518) Duties and taxes (9,892) (9,510) Net depreciation, amortisation and provisions Note 17 (23,187) (18,415) Purchases on dissimilar barter transactions (4,662) (5,009) Other operating income and expenses Note 18 (36,164) (36,069) Current EBIT 62,937 61,490 Non-recurring operating income and expenses (1,111) 964 Goodwill impairment charges Note 1 (998) Other non-recurring operating income and expenses Note 19 (113) 964 Operating income 61,826 62,454 Net debt servicing cost 978 1,030 Net income from cash and cash equivalents 992 1,054 Gross debt servicing cost (14) (24) Other financial income 1,258 2,118 Other financial expenses (1,112) (248) Financial income 1,124 2,900 Corporate income tax Note 20 (24,693) (19,342) Share in income of associates Note 21 (416) (165) Income from continuing operations, net of tax 37,841 45,847 Net income from discontinued operations Consolidated net income 37,841 45,847 - Group share 37,099 45,560 - Minority interests EARNINGS PER SHARE (in ) Undiluted earnings (Group share) Note Net income (Group share) from continuing operations Note Diluted net income (Group share) Note Diluted net income (Group share) from continuing operations Note

113 7.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in 000s) Notes 31/12/ /12/2011 Consolidated net income 37,841 45,847 Translation differential Other comprehensive income items recycled through net income Actuarial losses and gains relating to retirement benefits Note 10.1 (921) (511) Tax effect of actuarial losses and gains relating to retirement benefits Note Other comprehensive income items not recyclable through net income (604) (335) Total other comprehensive income items after tax (57) (254) Comprehensive income 37,784 45,593 - Group share 37,042 45,306 - Minority interests

114 7.4 CONSOLIDATED CASH FLOW STATEMENT (in 000s) Notes 31/12/ /12/2011 OPERATING ACTIVITIES Consolidated net income 37,841 45,847 Net depreciation, amortisation and provisions (excluding impairment provisions on current assets) Note 23 22,710 16,331 Gains (losses) from disposals Share in income of associates Note Dividends from associates Note Other items without cash impact Note Gross free cash flow after net debt servicing costs, other financial income and expenses, and taxes 62,315 63,001 Interest and income on disposals, net of interest (978) (1,056) Other financial income and expenses (146) (1,844) Tax charges (including deferred taxes) Note 20 24,693 19,342 Gross free cash flow before net debt servicing costs, other financial income and expenses, and taxes 85,884 79,443 Corporate income tax paid Note 14 (30,376) (23,857) Change in working capital requirement Note 24 (13,782) (114) Net cash flow generated by operating activities (A) 41,726 55,472 INVESTMENT ACTIVITIES Expenditure on acquisitions of property, plant and equipment, and intangible assets Note 25 (27,242) (33,137) Disbursements relating to acquisitions of non-current financial assets Note 25 (4,671) (784) Disbursements relating to acquisitions of consolidated companies, net of cash acquired (10) Receipts from sale of intangible and tangible fixed assets Receipts from sale of non-current financial assets 1,146 2,500 Cash flow allocated to investment activities (B) (30,703) (31,317) FINANCING ACTIVITIES Dividends paid by parent company (23,841) (24,310) Dividends paid to minority interests (80) (106) Capital increases subscribed for by minority shareholders 34 Loan issues Note Loan repayments Note 11.1 (320) (488) Interest and income received on disposals, net of interest paid 978 1,056 Other financial expenses paid and income received Acquisitions (disposals) of treasury stock 503 (16,391) Acquisitions/disposals of interests without a change in control of subsidiaries (20) (138) Cash flow allocated to financing activities (C) (21,408) (39,288) Impact of exchange rates (D) Change in net recurring cash (A) + (B) + (C) + (D) (10,172) (15,074) Net recurring cash at start of year (E) 94, ,008 Net recurring cash at year-end (A) + (B) + (C) + (D) + (E) Note 26 84,762 94,

115 7.5 STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY (in 000s) Share capital Share premiums Consolidated reserves and earnings Treasury shares Foreign currency translation reserves Shareholders equity - Group share Minority interests Shareholders equity Consolidated shareholders' equity at 1 January , ,727 (10,768) (175) 475,840 (500) 475, consolidated net income 45,560 45, ,847 Other comprehensive income items (254) (254) (254) 2011 comprehensive income 45,560 (254) 45, ,593 Dividend payments (24,926) (24,310) (106) (24,416) Share-based payments Adjustments to treasury shares 822 (16,409) (15,587) (15,587) Other transactions (4) 131 Consolidated shareholders' equity at 31 December , ,484 (27,177) (424) 482,013 (323) 481, consolidated net income 37,099 37, ,841 Other comprehensive income items (57) (57) (57) 2012 comprehensive income 37,099 (57) 37, ,784 Dividend payments (24,926) (23,841) (80) (23,921) Share-based payments Adjustments to treasury shares (20) (10,287) (3,564) 16,438 2,567 2,567 Other transactions (1,576) (1,576) 618 (958) Consolidated shareholders' equity at 31 December , ,499 (10,739) (481) 497, , Dividends not paid corresponding to treasury shares (see Note 9) 114

116 7.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTENTS (1/3) Significant events during the financial year General information International Financial Reporting Standards (IFRS) Statement of compliance: New IFRS New standards, amendments and interpretations adopted by the European Union with mandatory application after 1 January New standards, amendments and interpretations published by the IASB or IFRIC, adopted or not by the European Union, with potential early application in New standards, amendments and interpretations published by the IASB or IFRIC, not adopted by the European Union, with no potential early application in Options provided by the IFRS framework and adopted by the Group Bases for the preparation and presentation of the consolidated accounts Changes in methods Use of estimates Options chosen for valuing and recognising assets and liabilities Accounting principles and policies Criteria and basis for consolidation Foreign currency transactions Business combinations Intangible assets Property, plant and equipment Leasing agreements Impairment of intangible assets, property, plant and equipment, and investments in associates Financial assets Inventories Cash and cash equivalents Assets held for sale and discontinued operations Treasury shares Provisions and contingent liabilities Staff benefits Share-based payments Financial liabilities Financial derivatives Revenues Other income from operations Operating income and current EBIT Financial (expenses) income Corporate income tax Minority interests Net earnings per share Significant changes in the basis for consolidation... Page

117 CONTENTS (2/3) Page Segment reporting Information by business sector Income statement items Balance sheet items Non-financial investments during the year Information by geographic area Notes to balance sheet items, income statement and cash flow statement Notes to financial position statement items... Note 1 Goodwill... Note 2 - Other intangible assets... Note 3 - Property, plant and equipment... Note 4 - Non-current financial assets Breakdown of changes Maturities of non-current financial assets other than available-for-sale assets... Note 5 - Investments in associates Breakdown of changes Significant figures relating to affiliates... Note 6 - Inventories... Note 7 - Trade and other receivables... Note 8 - Cash and cash equivalents... Note 9 - Shareholders' equity Share capital Treasury shares and share buyback programme Stock options Dividends... Note 10 Provisions Change in provisions Provisions for severance pay on retirement... Note 11 - Financial liabilities relating to financing activities Breakdown of changes Schedule of maturities for financial liabilities relating to financing activities... Note 12 - Trade and other payables Breakdown of changes Schedule of maturities for trade payables and related... Note 13 - Deferred tax assets and liabilities... Note 14 - Current tax assets and liabilities Notes to the income statement... Note 15 - Staff costs... Note 16 - External costs... Note 17 - Net depreciation, amortisation and provisions... Note 18 - Other operating income and expenses... Note 19 - Other non-recurring operating income and expenses... Note 20 - Corporate income tax Detailed breakdown Rationalisation of the tax expense... Note 21 - Share in income of associates... Note 22 - Net earnings per share

118 CONTENTS (3/3) Page Notes to the cash flow statement... Note 23 - Net depreciation, amortisation and provisions... Note 24 - Changes in working capital requirement... Note 25 Investment transactions excluding shares of consolidated companies... Note 26 - Net recurring free cash flow Other information... Note 27 - Management of financial risks Market risks Exchange rate risk Interest rate risk Stock market risk Credit and/or counterparty risk Financial investments Outstanding trade receivables Maximum exposure to credit and counterparty risk Schedule of maturities for trade receivables Liquidity risk... Note 28 - Average headcount... Note 29 - Related party transactions Related companies Executive compensation Regulated agreements since the financial year-end... Note 30 - Off-balance sheet commitments Commitments given Commitments relating to business operations Commitments relating to the consolidated Group Other commitments Commitments received... Note 31 - Independent auditors' fees... Note 32 - Events since the year-end... Note 33 List of consolidated subsidiaries, joint ventures and associated companies as at 31 December

119 7.6 NOTES TO THE CONSOLI- DATED FINANCIAL STATEMENTS SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR Share buyback programme and capital reduction During its meeting on 29 August 2012, the Board of Directors decided to: change the allocation of 2,004,495 treasury shares initially allocated to cover stock options in order to allocate them to the cancellation objective, as authorised for the share buyback programme approved at the Combined General Meeting on 10 May 2012, reduce the share capital by 20, by cancelling 2,004,495 treasury shares allocated for cancellation, in accordance with the authority delegated to the Board of Directors by the Combined General Meeting on 10 May In addition, NRJ GROUP's liquidity agreement showed a net balance of 25 treasury shares at 31 December 2012, following the net sale of 69,986 treasury shares during the year, pour a net value of 488,000. After taking into account all shares purchased, sold and cancelled in 2012, as detailed above, NRJ GROUP held 1,500,025 of its own shares at 31 December 2012, equivalent to 1.85% of the post-cancellation share capital, compared with 3,574,506 treasury shares at 31 December 2011, equivalent to 4.30% of the precancellation share capital. CHERIE 25 Under the call for tenders that it launched on 18 October 2011 for broadcasting six high-definition digital terrestrial television (DTTV) channels, the Conseil Supérieur de l'audiovisuel, during a plenary session on Tuesday 27 March 2012, selected six projects, including the proposed CHERIE HD channel for women presented by NRJ GROUP. CHERIE HD started broadcasting its programmes in HD on 12 December 2012 under its trade name "CHERIE 25" GENERAL INFORMATION NRJ Group is a public limited company established under French law. Its registered office is located at 22 rue Boileau, Paris, France. NRJ GROUP shares are listed on Compartment B of Euronext Paris (ISIN: FR ). agreements with NRJ/ENERGY and/or NOSTAL- GIE/NOSTALGIA. In France, the Group is the private radio market leader and one of the new players on the television market. The Group is also a significant player on the radio broadcasting market, through its subsidiary towercast, number two on the French broadcasting market. The Group publishes, produces, broadcasts and markets its own media spaces. In France, it has been supported by the strength of the radio media and its brands NRJ, NOSTALGIE, CHERIE FM and RIRE & CHAN- SONS, by its marketing expertise and by its commercial power, in making use of new media, particularly in television - as well as ancillary activities in partnership such as mobile telephony - in order to follow and anticipate developments in consumption and offer a wider range of advertising services to its clients. The consolidated financial statements at 31 December 2012 were approved by the Board of Directors on 19 March Unless stated otherwise, they are expressed in thousands of euros IFRS FRAMEWORK STATEMENT OF COMPLIANCE In accordance with European regulation 1606/2002 of 19 July 2002, NRJ GROUP's consolidated financial statements are drawn up in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union at the financial year-end. The framework applied, available on the European Commission internet site ( _market/accounting/ias/index_fr.htm) includes the IAS/IFRS standards and the corresponding interpretations by the Standing Interpretations Committee (SIC) and IFRS Interpretations Committee NEW IFRS STANDARDS NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED BY THE EUROPEAN UNION WITH MANDATORY AP- PLICATION AFTER 1 JANUARY 2012 The Group has applied the amendment to IFRS 7 Disclosures: Transfers of financial assets (EU Regulation 1205/2011 of 23 November 2011), the only new mandatory standard to be applied since 1 January This standard has had no impact on the Group's consolidated accounts at 31 December The consolidated financial statements of NRJ GROUP reflect the accounting position of NRJ GROUP and its subsidiaries, collectively referred to hereinafter as "the Group", as well as its interests in associated undertakings. The financial year of 12 months ends on 31 December of each year. NRJ GROUP is one of the leading private media groups in France and an international player present in 22 other countries, either directly or under brand licensing 118

120 NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS PUBLISHED BY THE IASB OR IFRIC, ADOPTED OR NOT BY THE EUROPEAN UNION, WITH OPTION FOR EAR- LY APPLICATION IN 2012 Standards and interpretations adopted by the European Union at year-end Since 31 December 2011, the Group has opted for the early application of the amendment to IAS 1 Presentation of Items of Other Comprehensive Income (OCI) (EU Regulation 475/2012 of 5 June 2012), which has only been mandatory for financial years starting on or after 1 July However, the Group has opted against the early application of the following standards or interpretations that might concern it: IAS 28 (revised) Investments in Associates and Joint Ventures IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities. These standards and interpretations, covered by EU Regulation 1254/2012 of 11 December 2012, will be mandatory for financial years starting on or after 1 January The Group is currently assessing the impacts resulting from their first application, and particularly those relating to IFRS 11 Joint Arrangements, which removes the need to proportionally consolidate joint ventures. This consolidation method concerns seven companies from the basis for consolidation at 31 December 2012, with the main company being NOSTALGIE SA (Belgium). The Group does not in principle expect these standards to have any major impacts on its consolidated accounts. Amendment to IAS 19 Employee Benefits (EU Regulation 475/2012 of 5 June 2012 and correction published in the JOUE L252/58 on 19 September 2012), IFRS 13 Fair Value Measurement (EU Regulation 1255/2012 of 11 December 2012), Amendment to IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities (EU Regulation 1256/2012 of 13 December 2012). The early application of these standards and interpretations which will be mandatory from 1 January 2013 would not have had any material impact on the Group's consolidated accounts at 31 December Amendment to IAS 32 Offsetting Financial Assets and Financial Liabilities (EU Regulation 1256/2012 of 13 December 2012). The early application of this standard, which will be mandatory from 1 January 2014, would not have had any material impact on the accounts at 31 December Standards and interpretations not adopted by the European Union at year-end, but open to early application since they interpret texts that have already been adopted Annual improvements to IFRS " cycle" and IAS 32 Financial instruments: Presentation, published in May 2012, not yet adopted and mandatory for financial years beginning on or after 1 January 2013 according to the IASB, The Group opted against the early application of these standards NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS PUBLISHED BY THE IASB OR IFRIC, NOT ADOPTED BY THE EU- ROPEAN UNION, WITH NO OPTION FOR EAR- LY APPLICATION IN 2012 Subject to their adoption by the European Union, IFRS 9 Financial Instruments and its subsequent amendments will apply to the Group for financial years beginning on or after 1 January June 2012 saw the publication of amendments to IFRS 10, IFRS 11 and IFRS 12: transition guide, not yet adopted by the European Union. These standards are currently being analysed by the Group OPTIONS PROVIDED BY THE IFRS FRAMEWORK AND ADOPTED BY THE GROUP The options chosen by the Group for valuing and recognising assets and liabilities are presented in section In the context of the corresponding provisions of IFRS 1 First-time adoption of IFRS, the options used by the Group on the transition date to 1 January 2005 with regard to retroactive application of the IFRS were as follows: Business combinations implemented prior to 1 January 2005 have not been restated using the purchase method set forth in IFRS 3 Business combinations. Consequently, the goodwill arising from the public simplified exchange offers and purchase of shares by exchange that took place in 2000, between NRJ GROUP SA and its subsidiary NRJ SAS, allocated directly to shareholders' equity under the previous accounting framework, has not been reposted to assets. The presumed cost, at 1 January 2005, of intangible assets, property, plant and equipment corresponded to the value of these assets on 31 December 2004 calculated on the basis of the earlier framework, as it was decided not to take up the option of valuing these assets at fair value on the transition date. 119

121 7.6.4 BASES FOR PREPARING AND PRESENTING THE CONSOLIDATED FINANCIAL STATEMENTS CHANGES IN ACCOUNTING POLI- CY The accounting principles and policies used in drawing up the Group's consolidated financial statements are described in They have been applied consistently for the two financial years presented USE OF ESTIMATES The preparation of the consolidated financial statements according to IFRS standards requires management to use reasonable estimates and assumptions that may have an impact on the application of accounting policies and the amounts of the assets and liabilities that may not be obtained directly from other sources, revenues and costs that appear in the financial statements, as well as on certain information given in the notes to the consolidated financial statements. These estimates and assumptions are determined on a going concern basis using the information available at the time, previous experience and other factors considered to be reasonable in the circumstances. They are applied within the context of a persistently uncertain economic climate which makes it difficult to predict the future business outlook. Actual values may differ from the estimated values. At each year-end, the management team revises the assumptions and estimates if the circumstances on which they were based have changed, or if new information has become available to them. In accordance with IAS 8 - Accounting policies, changes in accounting estimates and errors, the impact of the changes in accounting estimates is recognised during the period of the change, if this affects this period only, or during the period of the change and future periods if these are also affected by the change. More specifically, the judgments, estimates and assumptions made based on the information available at year-end concern: the valuation of intangible assets acquired and their estimated lifespan (note 2), the testing of impairments on goodwill, other intangible assets and investments and related receivables in associates, in a particularly difficult and unpredictable economic environment (notes 1, 2 and 5),, the valuation of available-for-sale financial assets (note 4), the determination of the recoverable value of trade receivables (note 7), the determination of the recoverable value of inventories in the Television business (note 6), the determination of deferred tax assets (note 13), the valuation of liabilities relating to retirement benefits (note 10.2), the amount of provisions for litigation (note 10.1)., OPTIONS CHOSEN FOR VALUING AND RECOGNISING ASSETS AND LIABIL- ITIES In accordance with the options provided by certain international accounting standards for valuing and recognising assets and liabilities, the Group has decided to use: the historic cost valuation method for property, plant and equipment, and intangible assets, the proportional method for consolidation of jointly controlled entities. Individual Training Entitlement (DIF) Regarding the Individual Training Entitlement, as there were no specific provisions in the IFRS framework and since this concerned future training actions with a counterparty for the company, when preparing its consolidated accounts, the Group applies a similar treatment to that of French accounting standards (CNC emergency committee notice 2004-F of 13 October 2004 relating to the "recognition of the individual training entitlement (DIF)"). In this way: expenses incurred in connection with the DIF concern training actions recognised under expenses as and when employees benefit from them, the number of hours granted under the entitlement at the end of the financial year, with an indication of the number of hours not claimed by employees, is mentioned in the notes ACCOUNTING PRINCIPLES AND POLICIES CONSOLIDATION SCOPE AND CRITERIA The consolidated financial statements of the NRJ GROUP reflect the accounting situation of NRJ GROUP SA and its subsidiaries, as well as the Group's interests in joint ventures and associated undertakings. The consolidated entities financial statements are all drawn up at 31 December or within three months prior to 31 December. If the year-end is not consistent with this timeframe, the accounts of the subsidiaries concerned are adjusted, as relevant, in order to factor in any significant events or transactions that took place during the interim period. Moreover, when they are significantly different, the accounting principles and methods applied by consolidated entities in their unconsolidated financial statements are subject to harmonisation with the rules and methods used within the Group. Subsidiaries The subsidiaries are all entities controlled exclusively by the Group. Exclusive control results from the power to direct the financial and operational policies of the entity in order to obtain the benefits of its activities. This control is generally presumed to exist when the Group directly or indirectly holds more than half of the consolidated entity's voting rights. 120

122 Subsidiaries are consolidated using the full consolidation method. The subsidiaries' financial statements are integrated in the consolidated financial statements from the date on which they come under the control of the Group, until such control ends. Intra-group transactions and outstanding balances on transactions are eliminated. The proceeds from an exit of a subsidiary are recognised in other non-recurring operating income and expenses, since this represents an unusual and relatively infrequent event and failure to present the impacts of the exit separately from other results would skew the reading of the Group's performance. Joint ventures Joint ventures are entities over whose economic activity the Group exerts joint control under a contractual agreement. These are entities in which the Group usually holds 50% of the voting rights. Interests in joint ventures are consolidated proportionately. Intra-group transactions and outstanding balances on transactions are eliminated pro rata the percentage of joint control. The joint ventures' financial statements are consolidated proportionally in the consolidated financial statements from the date on which they come under joint control, until such control ends. The proceeds of an exit from a joint venture are recognised under "other non-recurring operating income and expenses", based on the same presentation principles as those retained for the proceeds from a subsidiary's exit. Associated undertakings Associated undertakings are entities over whose financial and operational policies the Group exerts a significant influence. These are entities in which the Group usually holds between 20% and 50% of the voting rights. Associated undertakings are consolidated using the equity method. Participating interests in associated undertakings are initially recognised at cost, then their book value is increased or decreased to recognise the Group's share in their earnings and other changes in shareholders' equity after the acquisition date. At year-end, the share in the negative equity of associates that have been granted advances is presented under "impairment of associate current accounts and loans", as associated entities for which the Group has a legal or implied obligation to cover the losses. An additional provision is recorded if the Group's commitment exceeds the receivables it holds in relation to the associated undertakings concerned. Goodwill relating to such entities is included in the book value of the interest. the income statement until the date on which the significant influence ends. The proceeds of an exit of an associated undertaking, in addition to the result coming from a reduction in the percentage stake, are recognised under "other nonrecurring operating income and expenses", based on the same presentation principles as those retained for proceeds from a subsidiary's exit FOREIGN CURRENCY TRANSAC- TIONS IAS 21 The effects of changes in foreign exchange rates sets out the provisions governing transactions in foreign currencies. Currency of presentation and operating currencies Each company in the Group keeps its accounts in its operating currency, i.e. the currency of the principal economic environment in which it operates, usually the local currency. Apart from the Swedish, Norwegian and Swiss entities, whose operating currencies are respectively the Swedish krona (SEK), the Norwegian krone (NOK) and the Swiss franc (CHF), the operating currency of Group entities is the euro (EUR). The consolidated financial statements are presented in euros, which is the Group's functional currency. Conversion of foreign entities' financial statements The financial statements of the Group s foreign entities whose operating currency is not the euro are converted into euros by applying the following principles: Assets and liabilities are converted using the exchange rate on the last day of the financial year. Income and costs are converted using the average exchange rate over the financial year, Exchange differences resulting from these conversions are recorded under other comprehensive income items (OCI) and are recorded in reserves. In the event of the sale or winding up of the entity concerned, the aggregate amount of deferred exchange differences is recognised through profit and loss. Recognition of transactions in foreign currencies in the individual financial statements Transactions in foreign currencies are recorded by applying the current exchange rate of the operating currency on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the financial year-end are converted using the exchange rate on this date, with the resulting exchange differences recognised as income or costs under financial income. Non-monetary assets and liabilities denominated in foreign currencies are recognised at the historical exchange rate applicable at the transaction date. The Group's share of the income of associated undertakings generated after the acquisition is recorded on 121

123 BUSINESS COMBINATIONS Recognition of business combinations after 1 January 2010 Business combinations carried out after 1 January 2010 are recognised in accordance with IFRS 3 (revised). Under this standard, the acquisition price corresponds to the fair value, on the acquisition date, of the assets transferred, equity issued and liabilities incurred. Any excess of the purchase price of shares over the share attributable to the Group in the fair value of the acquired company s identifiable assets and liabilities is recorded as goodwill. On the date when control is acquired, and for each business combination, the Group can opt to record either partial or full goodwill. In this case, minority interests are measured at fair value and the Group records goodwill on all the assets and liabilities transferred. Subsequent changes in the percentage interest without calling into question control over the acquired company represent operations between shareholders, with the difference between the redemption value (or disposal) and the book value of the share acquired recognised through equity. For an acquisition in stages, the interest previously held is remeasured at fair value on the date when control is acquired, with the difference between the fair value and the net book value of this interest recognised through profit and loss. Any earnouts are included in the acquisition cost and fair value as of the acquisition date, irrespective of how likely they are to occur. During the evaluation period, subsequent adjustments are recorded under goodwill when they relate to events and circumstances prior to the acquisition. Lastly, costs that are directly attributable to the acquisition of control are recorded as expenses. Recognition of business combinations prior to 1 January 2010 As indicated in Section , business combinations implemented prior to 1 January 2005, the IFRS transition date, have not been restated using the purchase method set forth in IFRS 3. For business combinations carried out between 1 January 2005 and 31 December 2009, since the revision of IFRS 3 is not backdated, the treatments retained up until 31 December 2009 have been maintained. In this way: Goodwill is still determined in line with the partial goodwill method, Acquisition costs which constituted part of the cost of business combinations are still included in the amount of goodwill recorded prior to 1 January 2010, Changes in the percentage interest held without calling into question control over the company acquired have led to additional goodwill being recorded for acquisitions or income for disposals. Goodwill Goodwill arising from the acquisition of a subsidiary or a joint venture is specifically identified as an intangible asset under 'Goodwill', whereas goodwill arising from the acquisition of associated companies is included in the book value of investments in associated undertakings. In cases where the share of the Group's interest in the fair value of the assets, identifiable liabilities and identifiable contingent liabilities exceeds the cost of the business combination (negative goodwill), the profit resulting from the acquisition under preferential conditions is recognised in profit and loss on the acquisition date, with no tax impact. Any adjustments to the value of assets and liabilities relating to acquisitions recognised on a provisional basis are recognised as a retrospective adjustment of goodwill if they occur within 12 months of the date of the acquisition, provided that the information obtained relates to events or circumstances that exist on the acquisition date and it would have modified the recognition of the business combination on the acquisition date if it had been known on this date. Beyond this 12-month period, the effects of any value adjustments are recorded directly as income, except where they correspond to corrections of errors. Each goodwill item is allocated to the various cashgenerating units involved in the business combination within 12 months of the acquisition date at the latest. Goodwill and adjustments to the value of goodwill relating to a foreign entity are treated as an asset of the same foreign entity. Goodwill recognised in the operating currency of a foreign entity by the entity that holds the securities is converted into euros using the exchange rate on the last day of the financial year. At the year-end date, goodwill is recognised at its initial cost, less any cumulative depreciation representative of impairments in accordance with IFRS 3 - Business combinations and IAS 36 - Impairment of assets. Impairments are recognised through profit and loss under operating income, and cannot be reversed. Impairment tests are carried out on goodwill items automatically on 31 December each year and whenever events or circumstances indicate they may have been impaired. Such events or circumstances arise whenever significant changes occur that cast doubts on the substance of the initial investment over a sustained period. The conditions retained by the Group for impairment tests are presented in Section

124 INTANGIBLE ASSETS The items recognised as intangible assets consist primarily of the NRJ and NOSTALGIE brands, as well as IT-related assets. Intangible assets are initially valued at their purchase or production cost or at their fair value when they are acquired through business combinations. Subsequent expenditure that is likely to increase the future economic advantages associated with the specific corresponding asset, and whose cost can be valued accurately, is recorded as an asset. Other expenditure is recognised as a cost on an accrual basis. At the end of the financial year, intangible assets are recognised on the consolidated balance sheet at cost, less amortisations and cumulative impairment charges determined in accordance with IAS 36 Impairment of assets. Useful life and amortisations The Group assesses whether the useful life of an intangible asset is finite or infinite. In this respect, the Group has classed the NRJ and NOSTALGIE brands as intangible assets with an infinite useful life. These intangible assets are not amortised once commissioned, but periodically subject to impairment tests that are similar to those applied for goodwill (see Note hereunder). Other intangible assets, categorised as having a finite useful life, are subject to amortisation, recognised as a cost using the straight-line method over their estimated useful life, from the time they are put into service. The estimated depreciation periods are as follows: Licences, patents and similar rights: maximum of three years, Software: three to five years, with the exception of ERP-type applications, which are amortised over seven years PROPERTY, PLANT AND EQUIP- MENT Property, plant and equipment are initially recognised at their purchase cost or at their fair value when acquired through business combinations. loss over the duration of the depreciable asset through a reduction in the depreciation charges. At the end of the financial year, property, plant and equipment are recognised at cost, less cumulative depreciations and any cumulative impairment charges, in accordance with IAS 36 Impairment of Assets. Property, plant and equipment are subject to depreciation recognised as a cost, and calculated using the straight-line method over their respective estimated useful life. The useful lives of property, plant and equipment are as follows: Type of assets Depreciation schedule (years) Land - Technical equipment and fittings 5 to 10 Buildings: - Major works 40 - Walls and roofing 30 - Technical installations 20 - Fittings 15 Fixtures and fittings 5 and 15 Vehicles 4 to 5 Office furniture 5 to 10 Office and IT equipment 3 to LEASING AGREEMENTS Pursuant to IAS 17 Leases, the leasing agreements entered into by the Group are split into two categories: finance lease agreements, operating lease agreements. Finance lease agreements Finance-leased assets are recorded as assets, with a financial debt recognised as a liability. At each close of accounts, an amortisation charge is recognised for the asset and the payments made under the lease are broken down between the financial section and the amortisation of debt so as to obtain a constant periodic interest rate. Operating lease agreements Lease charges are recognised as costs on the income statement on a straight-line basis over the corresponding lease term. If certain elements of the property, plant or equipment have a significant cost in relation to the total amount of this asset and useful lives that differ significantly from the other elements, they are recognised separately and depreciated over their particular useful life. Subsequent costs relating to the property, plant or equipment are only posted as assets if it is likely that the Group will benefit from the future associated economic advantages and if these costs can be valued accurately. Regular upkeep and maintenance costs are booked as expenses when they are incurred. Public subsidies relating to a particular asset are deducted from the asset's value to give its book value. In this way, the subsidy is recognised through profit and 123

125 IMPAIRMENT OF INTANGIBLE AS- SETS, PROPERTY, PLANT AND EQUIP- MENT, AND INVESTMENTS IN ASSOCI- ATES Impairments in the value of intangible assets and property, plant and equipment In accordance with IAS 36 - Impairment of assets, assets generating cash flows that are largely independent of other assets, as well as other assets that are grouped in cash-generating units (CGUs), are subject to impairment tests, annually for assets with an indefinite useful life (brands, goodwill) and when dictated by new events or circumstances indicating that assets and CGUs may have fallen in value. A CGU is the smallest identifiable group of assets that generate cash inflows that are largely independent of cash generated by other assets or groups of assets. The events or circumstances which indicate that an impairment loss is likely to result include the following qualitative and quantitative indicators: changes in audience levels or advertising market share, changes in market conditions that could lead to a lasting fall in revenues or recurring operating income of the businesses concerned, technological developments, regulatory changes, changes in the property market. An impairment loss is recorded if the book value of the asset considered, or the CGU to which the asset considered belongs, exceeds its recoverable amount. The recoverable amount of an asset or a CGU is the greater of: its fair value, less selling costs, determined based on market multiples factoring in recent transactions, its going concern value, which is determined on the basis of estimates of discounted future cash flows. Discounted future cash flows are estimated using the following principles: Cash flows after tax are based on three-year operating cash flow forecasts, which are drawn up by the Group's various operational entities and consolidated at Group level. These overall flows are assessed by the executive management team, modified if necessary and then presented to the Audit Committee. These three-year flows are supplemented with two to four-year flows depending on the activities in order to take their specific features into consideration (staggering of tax loss carryforwards and research into normative cash flow on investments, as applicable). The discount rate used is a rate after tax. The terminal value is calculated by adding the discounted future cash flows, determined on the basis of normative cash flows and a perpetual growth rate. The rates used for asset impairment tests are as follows: CGU/sector 31/12/ /12/2011 Music Media and Events DR 1 % PG 2 % DR 1 % PG 2 % Television International Shows and Other Productions Broadcasting Other business Discount rate (WACC) 2 Perpetual growth rate 3 Key assumptions are identical for each country within the same region. In 2012, the discount rates were based on a comparative study conducted of the discount rates used by the brokerage firms covering NRJ GROUP shares. Moreover, in view of this benchmark and the certain business maturity reached by the company towercast at the end of 2012, the Group decided to retain a discount rate of 10% for the Broadcasting CGU. Goodwill impairment tests are carried out for each CGU representing an operational sector, as well as for each country within the International CGU; this breakdown corresponds to the lowest level at which each item of goodwill is monitored in terms of the Group's internal management. The impairment in value recorded for a CGU is initially allocated to reducing the book value of any goodwill associated with this CGU, and then to reducing the book value of other assets of the CGU, on a pro rata basis to the book value of each asset. Impairment losses on goodwill are recognised through profit and loss under "other non-current operating expenses and income". Impairment losses on property, plant and equipment and intangible assets other than goodwill are recorded under "net depreciation, amortisation and provisions" or, where appropriate, under 'other non-recurring operating income and expenses" (see ). Impairment of investments in associates Pursuant to the clauses of IAS 28 Investments in Associates: goodwill included in the book value of an investment in an associate consolidated using the equity method is not recorded separately and is therefore not individually subject to impairment tests pursuant to IAS 36 - Impairment of assets, the Group applies IAS 39 - Financial instruments: Recognition and measurement to determine whether the investment in an associate has lost value. Within this framework, the total book value of the investment is subject to impairment tests in accordance with IAS 36 Impairment of assets based on the same criteria as those retained for property, plant and equipment and intangible assets (see ). 124

126 Any loss in value determined in this way is recognised in the income statement under 'Share in income of associates'. Reversals of impairment charges on goodwill Goodwill impairment charges are irreversible and, as such, cannot be reversed. Reversal of impairment charges for Investments in associated undertakings Any reversals of impairment charges determined are recognised through profit and loss under "share in income of associates". Reversal of impairment of intangible and tangible assets other than goodwill On each account close date, the Group assesses if new events or circumstances indicate that an impairment recorded over previous periods is likely to be reversed. When the recoverable value, determined on the basis of new estimates, exceeds the net book value of the asset considered, the Group reverses the loss in value up to the book value that would have been recognised, net of amortisation, if no impairment loss had been recorded. Such reversals of impairment charges are recognised through profit and loss under "net depreciation, amortisation and provisions" or, as relevant, "other nonrecurring operating income and expenses" (cf ) FINANCIAL ASSETS Financial assets are broken down into the following four categories: investments held to maturity, available-for-sale financial assets, loans and receivables, financial assets measured at fair value through the income statement. These assets are broken down into current and noncurrent assets in accordance with IAS 1. Investments held to maturity Investments held to maturity are non-derivative financial assets, with payments that are either determined or determinable and a fixed maturity, which the Group has the clear intention and capacity to hold until maturity. This definition did not apply to any of the assets held by the Group at year-end 2012 or Available-for-sale financial assets Within the Group, available-for-sale financial assets primarily correspond to unconsolidated investment securities, as well as shares or units in UCITS allocated to cover the liquidity agreement on treasury shares. When they are first recorded, these assets are measured at their fair value, which corresponds to their purchase cost plus any transaction costs. At the financial year-end, available-for-sale financial assets are measured at their fair value, when this can be accurately determined. This fair value may use the valuation techniques based on non-observable data. Changes in fair value are recorded in equity capital, apart from impairments of a permanent nature, which are entered into the income statement. Changes in fair value recorded in equity are recycled into earnings when the assets concerned are sold. Loans and receivables Loans and receivables include trade and other receivables, receivables from subsidiaries, loans and deposits, cash that is unavailable and loans and current account advances made to associated companies. When first recorded, loans and receivables are measured at their fair value plus transaction costs. At the financial year-end, loans and receivables are valued at their amortised cost, using the effective interest rate method. However, trade receivables that are due within one year, with no interest rate indicated, are valued at the amounts of the initial invoice when the discount effect is negligible. Long-term loans and receivables that are not subject to interest or accrue interest at a below-market rate are discounted when the sums are significant. An impairment charge is recognised when there are objective factors suggesting that the Group will not be able to recover the debt concerned. The impairment may be reversed if the recoverable value is likely to improve over subsequent financial years. Bad debts are recorded as losses when identified as such. Financial assets measured at fair value through the income statement These assets correspond to: assets held for trading purposes, assets that are explicitly classified by the Group in this category when they are first recorded. At 31 December 2012 and 31 December 2011, the Group did not hold any assets that met this definition INVENTORIES Inventories consist of stocks of programmes and broadcasting rights, and, on an ancillary basis, stocks of products and goods. Programmes and broadcasting rights Recording in inventories occurs when the programme is considered as broadcastable, i.e. once the corresponding rights are open and the programme has been accepted technically. The portion of rights invoiced before being technically accepted and before the rights are opened is recorded under Advances and prepayments to suppliers ; rights that are not open and have not yet been invoiced are presented as off-balance sheet commitments. 125

127 Programmes and broadcasting rights are initially valued at their overall production cost (own production) or at their purchase cost (external production). At year-end, they are valued at their initial cost less utilisation during the financial year. Programmes and broadcasting rights are considered to be used when they are broadcast in line with the following conditions: Programmes that are broadcast once only: 100% on their first broadcast, Programmes that are broadcast more than once: 1st broadcast: 50%, 2nd broadcast: 50%. Different utilisation conditions may be considered for rights that have been acquired, with their potential audience levels varying significantly between the first and the second broadcast. In addition, rights relating to programmes which are unlikely to be broadcast are subject to impairment based on an individual review of each programme in the broadcasting rights portfolio. Rights that have not been used or have expired are retired and recorded in current EBIT. Any corresponding provisions are reversed. Other inventories These inventories, comprising various goods and products, are initially recorded at cost. At year-end, they are valued at the lowest of their initial cost and their net realisable value, corresponding to the expected sale price after subtracting the estimated selling costs. An impairment charge is recorded if the net realisable value is less than the initial cost CASH AND CASH EQUIVALENTS Cash equivalents are held to meet short-term cash requirements. They relate to short-term investments that are highly liquid, easily convertible into a quantifiable amount of cash and subject to a negligible risk of changes in value. Within the Group, cash equivalents consist of units in UCITS, as well as time deposits and accounts. The Group exclusively holds units in UCITS and/or equities classed by the AMF as "money market" or "short-term money market" categories, which are therefore presumed to be compliant with the four criteria for eligibility as "cash equivalents". In addition, the Group regularly ensures that the UCITS in which units are held involve negligible changes in value compared with their historical performance levels. Time deposits and accounts classed as "cash equivalents" are either investments with a maturity of less than or equal to three months, or investments that involve a longer maturity, but are contractually covered by early exit options that may be exercised at any time without any penalties and that do not involve a value risk linked to the level of remuneration acquired ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS Pursuant to IFRS 5 - Non-current assets held for sale and discontinued operations, non-current assets and groups of assets held for sale are classified as such when it is deemed that their book value will be recovered principally through a sale transaction rather than through continuing use. This condition is considered as being met when the sale is highly likely within a reasonable time span, and that the asset or group of assets to be sold is available for immediate sale in its present state and when management has planned to sell the asset. In accordance with 12 of the standard, if these criteria are met after the year-end date and before the date the financial statements are approved for publication, a simple disclosure is made in the notes to the financial statements. When they are classified, non-current assets and groups of assets held for sale are valued at the lower of their net book value and fair value, less selling costs. An impairment charge is recorded if applicable. No amortisation is subsequently applied TREASURY SHARES NRJ GROUP shares held by the Group, for whatever purpose, are charged against shareholders' equity at their purchase price. Any gain or loss resulting from the purchase, sale, issue or cancellation of the Group's treasury shares is recognised net of any tax effect directly against shareholders' equity and therefore does not affect the income statement PROVISIONS AND CONTINGENT LIABILITIES Pursuant to IAS 37 - Provisions, contingent liabilities and contingent assets, a provision is recorded when: the Group has a current obligation to a third party, whether legal or implied, resulting from a past event, it is probable that an outflow of resources representing financial benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably. The Group assesses the provisions based on the facts and circumstances relating to existing obligations at the financial year-end date, based on its experience and to the best of its knowledge at this date. Contingent liabilities represent the potential obligations resulting from past events and whose existence will only be confirmed by the possible occurrence of one or more uncertain future events that are not completely under the Group s control, as well as the current obligations resulting from past events, but for which the payment of resources representing financial benefits is relatively unlikely or cannot be measured reliably. No provisions are made for contingent liabilities, except for in connection with business combinations.

128 STAFF BENEFITS Short-term benefits - Employee profit sharing The French companies in which the Group had a stake of at least 50% on 1 January benefit from the Group's employee profit sharing agreement. The method used to calculate the special reserve for profit sharing under this Group agreement is provided by law. However, the reserve determined by this method is split between all the employees of companies that have signed the agreement, whatever their financial performance, provided that employees can demonstrate a minimum length of service of three months. Short-term benefits Discretionary profit-sharing (intéressement) and bonuses A discretionary profit-sharing agreement has been in place for the NRJ Group Boileau employment unit's French companies since 31 December 2012 inclusive, covering a three-year period. At each year-end, a provision is recorded for the expected cost of payments to be made in relation to this obligation. As all the payments to be made under this agreement are due within 12 months of the end of the period during which the members of staff provided the corresponding services, these payments are classed as short-term benefits. Similarly, a liability is recorded for the expected cost of payments to be made for bonuses paid in cash over the short term when the Group has a current, legal or implied obligation to make such payments in consideration for past services and the obligation can be reliably estimated. Pension-related liabilities and other long-term staff benefits Group employees receive retirement benefits through defined-contribution and defined-benefit schemes. Defined-contribution schemes For basic schemes and other defined-contribution schemes, the Group recognises contributions under Staff costs when they fall due and no provisions are recorded, as the Group s liability cannot exceed the amount of contributions paid. This is particularly the case for general and supplementary French pension schemes in which employees of the Group's French subsidiaries are enrolled. Defined-benefit schemes In connection with defined-benefit schemes relating to post-employment benefits (severance pay for retirement), the commitments, determined by an independent actuary, are: estimated using the 'projected credit units' actuarial method, applied to the expected date of retirement with final salary, based on the agreements in force in each Group company concerned, recorded under provisions. Under the projected credit units method: entitlements to benefits are allocated to periods of service according to the formula vesting the scheme s agreed entitlements, taking into account 127 a linearisation effect when the rate of acquisition of entitlements is not uniform over future periods of service, the amount of future payments corresponding to the benefits granted to employees is measured on the basis of long-term assumptions relating to demographic data (staff turnover per age bracket, life expectancy) and financial data (annual rate of wage increases and discount rate). Actuarial differences resulting from changes in actuarial assumptions and experience-related adjustments are recognised under "other comprehensive income items not recyclable through net income". The charge for the financial year, which corresponds to the total cost of benefits provided, the accretion expense and the cost of past benefits, is recorded under 'Staff costs'. Termination benefits and restructuring measures The estimated cost of termination benefits and restructuring measures are recorded as an expense when the Group is clearly committed to an almost irreversible formalised and detailed redundancy plan SHARE-BASED PAYMENTS NRJ GROUP has set up stock option plans for certain members of its staff. Pursuant to IFRS 2 - Share-based payments, benefits awarded under stock option plans represent supplementary pay, which is recorded in personnel expenses against shareholders equity over the vesting period for the rights representing the benefits awarded. The fair value of benefits received in exchange for the granting of options has been definitively valued using a binomial model, referring to the fair value of options on the date they were granted. If options are exercised, the amount of cash received by the Group will be booked against reserves FINANCIAL LIABILITIES IAS 39, Financial instruments: Recognition and measurement, distinguishes between two categories of financial liabilities: financial liabilities measured at their fair value through the income statement, corresponding to liabilities held for trading purposes, and liabilities explicitly classified by the Group in this category when they are first recognised, liabilities valued at their amortised cost. When first recorded, these liabilities are measured at their fair value plus transaction costs. At the financial yearend, they are valued at their amortised cost, using the effective interest rate method. When they are due within one year, and their present value adjustment is not significant, they are valued at historic cost, corresponding to the liability's face value. The Group s financial liabilities mainly comprise trade and other payables, which are valued at their amortised cost.

129 Financial liabilities are broken down into current and non-current liabilities in accordance with IAS DERIVATIVE FINANCIAL IN- STRUMENTS Pursuant to IAS 39 Financial instruments: Recognition and measurement, derivative financial instruments are initially recorded at the fair value at which the contracts entered into force. They are subsequently measured at their fair value at year-end and recorded as assets when the fair value is positive, while they are recorded as liabilities when their fair value is negative. Hedging derivative instruments In 2012, as in 2011, since the Group was not exposed to any significant interest rate or foreign exchange risk, it did not use any derivative financial instruments to hedge fair value or cash flows. Derivative financial instruments not considered as hedging instruments Gains and losses resulting from changes in the fair value of derivative instruments that are not classified as hedging instruments are recorded in the income statement REVENUES Revenues correspond to income from the ordinary business operations of subsidiaries and joint ventures. Income from ordinary business is recorded once: the future financial benefits resulting from the transaction considered will probably be consolidated by the Group, the amount of this income and the corresponding costs can be valued accurately, the recovery of this sum appears likely on the transaction date. The principles for recording revenues by business division are as follows: Advertising revenues are recorded over the period during which the advertisements are broadcast. Depending on the legal terms of contracts, advertising management services for third parties are recorded in revenues: - for the amount charged to the advertiser when the bulk of marketing risk is borne by the agency, the amount repaid to the medium is recorded in operating expenses, - for the net repayment amount when the majority of marketing risks remain the responsibility of the medium. Brand royalties are recorded as revenues prorata temporis at the same rate as the revenues which they enable the licensee to generate. - or goods are delivered. Barter transactions Advertising revenues can be broken down into two categories: revenues with a cash flow consideration, revenues from transactions that do not generate cash flows ( barter transactions ). If the bartered goods or services are similar ('similar barter transactions'), the revenues resulting from the advertising provided, the purchases and other costs relating to the advertising received and the corresponding receivables and debts are not valued. However, for 'dissimilar barter transactions', the revenues and purchases are valued at the price agreed in the contract and are recorded in the income statement as and when the product is broadcast, in the case of revenues, or utilised, in the case of costs OTHER INCOME FROM OPERA- TIONS Other income from business mainly relates to income from the Group's Swedish and Norwegian businesses, operating subsidies and other miscellaneous operating income OPERATING INCOME AND CUR- RENT EBIT Operating income is the sum of current EBIT and the item non-recurring operating income and expenses. In accordance with 85 of IAS 1, Presentation of Financial Statements, the total 'current EBIT' is presented to facilitate interpretation of the Group's financial performance. In addition, CNC recommendation 2009-R-03 is applied for the definition of this aggregate. The following are isolated under the item 'Non-recurring operating expenses and income': elements which, by their nature, frequency and/or relative importance, have little value in predicting the Group's future performance and which, if they were not isolated, would make it more difficult to understand and evaluate the Group's financial performance. Accordingly, non-recurring operating expenses and income include: restructuring costs relating to exceptional and major plans, major falls in value (excluding restructuring) on property, plant and equipment, and intangible assets, including those relating to goodwill and, where applicable, the corresponding reversals, major capital gains or losses on disposals of property, plant and equipment and intangible assets, consolidation capital gains or losses, major litigation costs or provisions. Revenues from other businesses are recorded when the service is completed, i.e. when: - the event takes place, - the show is staged, - broadcast services are provided, 128 Current EBIT, which is one of the Group s key performance indicators, corresponds to net income before taking into account: other non-recurring operating income and expenses,

130 financial income and expenses, corporate income tax (due and deferred), share in income of associates, after-tax income from businesses discontinued or being sold FINANCIAL INCOME (EXPENSE) Net financial income is the sum of the net debt servicing cost and 'other financial income and expenses'. Net debt servicing cost The net debt servicing cost includes: income from cash and cash equivalents, consisting of interest income generated by cash and cash equivalents, as well as proceeds from the sale of cash items, the gross debt servicing cost, i.e. interest charges on financing transactions. Other financial income and expenses Other financial income and expenses mainly include dividends received from non-consolidated companies, proceeds from the sale of available-for-sale financial assets and proceeds from discounting, as well as exchange gains and losses on items not included in net financial debt CORPORATE INCOME TAX Corporate income tax corresponds to the sum of tax due by Group companies, corrected for deferred tax. Tax due Tax due corresponds to the corporate income tax expense, as well as the expense resulting from the CVAE contribution for enterprise added value. Unpaid tax due for the financial year and from any earlier periods is recorded in the income statement as a current liability. If the amount already paid for the period and earlier periods exceeds the amount due for these periods, the excess is recorded as a current asset. Current tax assets and liabilities are offset when it is legally possible to offset the assets with liabilities, and when the tax is levied by the same tax authority and the Group intends to settle these tax assets and liabilities due on the basis of the net amount. Deferred tax The expense or income from deferred tax is recorded in the income statement as a non-current asset or liability. However, the deferred tax expense or income is recognised under other comprehensive income items or shareholders' equity when this charge or income relates to items that are directly recorded under other comprehensive income items or shareholders' equity. Pursuant to IAS 12 Income Tax, deferred tax is recorded on all the temporary differences between the book value of assets and liabilities recorded in the consolidated accounts and their tax value - with the exception of particular cases provided for by the standard and 129 particularly that of non-tax-deductible goodwill depreciation - as well as on temporary timing differences for tax, tax loss carry-forwards and certain consolidation restatements. The amount of tax is determined using the method of the variable carryforward, considering the latest applicable tax rates, or rates which have nearly been adopted on the financial year-end date and which are applicable on the date these differences will be repaid. Deferred tax assets are only recorded in as far as it is probable that a taxable profit will be available, resulting in a tax charge against which they may be offset. The book value of deferred tax assets is revised at each financial year-end date and an impairment charge is recorded when business forecasts suggest that these assets are unlikely to be recovered. Tax consolidation NRJ GROUP has opted for the tax consolidation regime, provided for in Article 223 A of the French General Tax Code. At 31 December 2012, the tax consolidation group comprised 25 companies (same number as at 31 December 2011), the main ones being: NRJ SAS, NRJ GLOBAL SAS, NRJ 12 SARL, TOWERCAST SAS, NRJ PRODUCTION SAS, REGIE NETWORKS SAS, CHERIE FM SAS, RIRE & CHANSONS SAS and RADIO NOSTALGIE SAS. As the head company in the tax consolidation group, NRJ GROUP is the sole entity liable for corporate income tax for the consolidated group. According to the terms of agreements for fiscal integration between NRJ GROUP and its integrated subsidiaries: each company is treated as though it were taxed separately, any tax gains or expenses relating to consolidated companies are recorded in the accounts of NRJ GROUP, at the time of the company's exit from the tax consolidation group, NRJ GROUP and the exiting company determine by mutual agreement if the exiting company has suffered additional costs because of its belonging to the Group and, if so, if this justifies its compensation by NRJ GROUP MINORITY INTERESTS Pursuant to IAS 27 (revised) - Consolidated and individual financial statements, minority interests are recorded on a separate line in the consolidated balance sheet. They correspond to the share of equity capital of subsidiaries, which is not attributable, directly or indirectly, to the parent company. The income statement records the share of consolidated net income for minority interests. Until 31 December 2009, minority interests were attributed to the Group share, unless the minority shareholders were committed and able to cover their proportion of the losses. Pursuant to the IAS 27 standard, as amended, all losses returning to minority shareholders are attributed to them. There is only one exception to this clause depending on the actual commitments and possibilities of minorities to contribute to the financing of

131 losses, or according to specific agreements reached by minority shareholders with the Group EARNINGS PER SHARE Earnings per share are calculated by dividing net income (Group share) by the average number of shares in issue during the financial year, restated pro-rata temporis from the date the Group purchased its treasury shares. Diluted earnings per share are calculated in the same way, taking into account in the average number of shares in issue, the conversion of existing potentially dilutive instruments (stock option plans). The method used is the stock-repurchase method, by which the funds that will be collected during the purchase of shares are first allocated to share purchases at the market price. Only options whose exercise price is less than the average price of the NRJ GROUP share over the period considered are used for the calculation. The exercise price is determined by taking into account the fair value of services remaining to be provided, determined according to IFRS 2 Share-based Payment SIGNIFICANT CHANGES IN CONSOLIDATION SCOPE The list of the entities included in the Group's scope of consolidation at 31 December 2012 appears in Note 33. In terms of the number of companies, there were the following changes in the Group's consolidation scope during 2012: Number of companies at 31 December 2011 Consolidation method FC (a) PC (b) EQ (c) Total Creations (i) 1 1 Mergers (ii) (7) (7) Number of companies at 31 December 2012 (a) Full consolidation (b) Proportionate consolidation (c) Equity affiliate (i) Creations On 18 July 2012, the NRJ, TF1 and AMAURY groups, which respectively own a new high-definition channel on free DTTV, as decided by the French audiovisual supervisory council on 27 March 2012, created the joint venture MULTIPLEX HAUTE DEFINITION 7 SAS with a view to operating the R7 multiplex assigned to them after being randomly selected by the French audiovisual supervisory council on 5 June (ii) France Mergers On 31 December 2012, the company SW RADI- ODIFFUSION SAS was wound up early, resulting in all its assets and liabilities being transferred to its shareholder NRJ SAS. Prior to this operation, it had sold its interests in various Swedish subsidiaries to their other shareholder, the Swedish company RBS BROADCAST- ING AB. Germany As part of the streamlining of the Group s structure in Germany, six absorption mergers were approved on 13 August 2012, effective retroactively to 1 January 2012: Merger of BCF RADIOBETRIEBS- UND BE- TEILIGUNGSGESELLSCHAFT mbh with RMR RADIOBETRIEBS- UND BETEILIGUNGSGESELL- SCHAFT mbh, Merger of NRJ SERVICES & SOLUTIONS GmbH with ENERGY MEDIA GmbH, Merger of RADIO4YOU(Th) with RADIO NRJ GmbH. Prior to this operation, the Group had raised its capital stake from 80% to 100%, Merger of NRJ DIENSTLEISTUNGS- UND VER- MARKTUNGS GmbH, RADIO NRJ BERLIN & BRANDENBURG GmbH and RADIO SOUND- TRACK PROGRAMMANBIETERGESELLSCHAFT FÜR NEUE MEDIEN GmbH with NRJ HORFUNK BAYERN, which also changed its name to NRJ HORFUNK BETEILIGUNGS GmbH. (iii) Changes in consolidation scope In addition, various changes were recorded in terms of the percentages held as interests, without modifying the consolidation method. The most significant concern: the company Chérie FM AQUITAINE SUD SAS, in which the shareholder, CHERIE FM RESEAU SAS, itself a 99.99%-owned Group subsidiary, raised its capital stake from 60% to 100%, TELIF SAS, with the Group's interest in this company's capital rising from 80% to 100% following a capital reduction based on a clearing of losses, followed by a capital increase that was not subscribed for by the minority shareholder. since TELIF SAS also held 20% of the share capital of SOCIETE DE TELEVISION LOCALE SAS, the Group's interest in the latter was raised from 91% to 95%. 130

132 7.6.7 SEGMENT REPORTING The segmentation which serves as a basis for the internal reporting presentation used by the CEO and the executive directors, as well as the valuation methods of the sectorial result have not changed from one year to the next. In addition, no operational segments have been grouped together since IFRS 8 came into force INFORMATION BY BUSINESS SECTOR INCOME STATEMENT ITEMS Revenues excl. dissimilar barters 1 Current EBIT excl. dissimilar barters 1 Business segment 31/12/ /12/ /12/ /12/2011 Music Media and Events 202, ,554 48,089 53,433 Television 83,446 77,748 (5,306) (1,659) International Business 42,705 40,027 4, Shows and Other Productions 15,220 3,066 4,422 1,683 Broadcasting 48,938 42,057 12,730 8,225 Other business 2 (442) (1,149) Total 392, ,452 63,531 61,228 1 The information provided to the Chairman and CEO and the Executive Directors excludes dissimilar barters 2 The "Other Business" segment groups together the support functions relating to the NRJ GROUP holding activity, IT activities, emerging technology watch and studio maintenance activities, as well as the Group's real estate activities. The following table reconciles the above table with consolidated net income: 31/12/ /12/2011 Current EBIT excluding dissimilar barters 63,531 61,228 Operating income from dissimilar barters (594) 262 Current EBIT 62,937 61,490 Non-recurring operating income and expenses (1,111) 964 Operating income 61,826 62,454 Financial income 1,124 2,900 Share in income of associates (416) (165) Corporate income tax (24,693) (19,342) Consolidated net income 37,841 45, BALANCE SHEET ITEMS Segment assets Business segment Goodwill Other property, plant and equipment and intangible assets Inventories Total Music Media and Events 106, ,032 96,447 96, , ,426 Television 3,205 3,205 1,933 2,316 60,269 59,496 65,407 65,017 International Business 24,380 25,379 4,081 4,480 28,461 29,859 Shows and Other Productions 2, , Broadcasting 3,068 3,068 68,425 68,201 71,493 71,269 Other business ,669 54,458 54,801 54,590 Total 136, , , ,127 60,345 59, , ,

133 The following table reconciles total segment assets with total consolidated balance sheet assets: 31/12/ /12/2011 Segment assets 425, ,486 Non-current financial assets 10,339 7,090 Investments in associates 2,344 2,410 Deferred tax assets 5,036 5,202 Trade and other receivables 165, ,074 Current tax assets 3, Current financial assets 523 Cash and cash equivalents 84,763 95,072 Total consolidated balance sheet assets 697, ,410 Segment liabilities Note that no liabilities are assigned to the business segments in the internal reporting system used by the Chairman & Chief Executive Officer and the Executive Directors NON-FINANCIAL INVESTMENTS DURING THE YEAR Business segment 31/12/ /12/2011 Music Media and Events Television International Business 951 1,350 Shows and Other Productions 4, Broadcasting 10,927 23,110 Other business 9,074 7,382 Total 26,821 33,222 The following table reconciles this data with the Group's consolidated cash flow statement: 31/12/ /12/2011 Non-financial investments 26,821 33,222 Change in debt relating to acquisitions of property, plant and equipment and intangible assets 421 (85) Expenditure on acquisitions of property, plant and equipment, and intangible assets 27,242 33, INFORMATION BY GEOGRAPHIC AREA The following table provides a breakdown of key data by geographic area: France International Total 31/12/ /12/ /12/ /12/ /12/ /12/2011 Revenues (1) 349, ,425 43,418 40, , ,452 Segment assets (2) 396, ,627 29,098 29, , ,486 Non-financial investments 25,854 31, ,350 26,821 33,222 (1) Revenues excluding dissimilar barters. "International" revenues correspond to revenues generated by the international segment and export revenues generated by French entities. (2) Segment assets broken down depending on the geographic location of assets. 132

134 7.6.8 NOTES TO BALANCE SHEET ITEMS, INCOME STATEMENT AND CASH FLOW STATEMENT NOTES TO FINANCIAL POSITION STATEMENT ITEMS NOTE 1 - GOODWILL Year-on-year changes in the net amount of goodwill are presented in the following table: FY 2012 Business segment 31/12/2011 Music Media and Events Acquisitions and increases Disposals and reductions Other Depreciation for the year 31/12/ , ,119 Television 3,205 3,205 International Business 25,379 (1) (998) 24,380 Broadcasting 3,068 3,068 Other business Net amount 137, (1) (998) 136,904 FY 2011 Business segment 31/12/2010 Music Media and Events Acquisitions and increases Disposals and reductions Changes in scope Depreciation for the year 31/12/ , ,032 Television 3,205 3,205 International Business 25,379 25,379 Broadcasting 3,068 3,068 Other business Net amount 137, ,816 In 2012, the tests conducted on the recoverable values of the CGUs to which goodwill is attached did not reveal any impairments, with the exception of goodwill relating to Frankfurt Business Radio GmbH & Co. Betriebs KG (Germany), depreciated for 231,000, and goodwill relating to the Austrian companies from the scope (Austria), depreciated for 767,000. In accordance with the principle indicated in , the recoverable value of a CGU is the greater of its market value less selling costs and its going concern value, which is determined on the basis of estimates of discounted future cash flows. For the "Music Media and Events" and "Broadcasting" segments, as well as each country (excluding Austria) making up the International segment, the sensitivity tests carried out with discount rates increased by 1% or perpetual growth rates reduced by 1% would not have led to the recording of additional impairments at 31 December The parameters used to determine the utility value according to the discounted cash flow method are detailed in For Austria and the Television division, the application of the principle outlined above resulted in the recoverable value being determined based on a market value, which does not depend on the sensitivity of the various parameters used to estimate discounted cash flows. 133

135 NOTE 2 - OTHER INTANGIBLE ASSETS The year-on-year changes in the gross values of other intangible assets and the corresponding depreciation and provisions are presented in the following table: FY /12/2011 Acquisitions and increases Disposals and reductions Other changes Reclassifications 3 31/12/2012 NRJ brand 1 49,474 49,474 NOSTALGIE brand 2 45,735 45,735 Other intangible assets 40,231 6,274 (2,230) ,847 Gross value 135,440 6,274 (2,330) ,056 NRJ and NOSTALGIE brands - - Other intangible assets 30,490 5,599 (2,230) ,121 Depreciation and amortisation 30,490 5,599 (2,230) ,121 Net value 104, ,935 3 With a corresponding entry under property, plant and equipment FY /12/2010 Acquisitions and increases Disposals and reductions Other changes Reclassifications 3 31/12/2011 NRJ brand 1 49,474 49,474 NOSTALGIE brand 2 45,735 45,735 Other intangible assets 40,089 3,561 (3,298) 21 (142) 40,231 Gross value 135,298 3,561 (3,298) 21 (142) 135,440 NRJ and NOSTALGIE brands - - Other intangible assets 30,327 3,455 (3,295) 3 30,490 Depreciation and amortisation 30,327 3,455 (3,295) 3 30,490 Net value 104, (3) 21 (145) 104,950 3 With a corresponding entry under property, plant and equipment Brands 1 The NRJ brand has been recorded in the consolidated balance sheet for million following the contribution from Mr Jean-Paul Baudecroux to NRJ GROUP SA under the combined contribution agreement dated 8 April 2000 and for 690,000 following the attribution of goodwill for the Swiss company Energy Branding SA, acquired in February The NOSTALGIE brand was recorded as an asset on the consolidated balance sheet on the acquisition of 80% of the company Nostalgie SA by the Group in May The NRJ and NOSTALGIE brands, allocated to the "Music Media and Events" segment and classed as intangible fixed assets with indefinite lifespans, have not resulted in any depreciation. The CHÉRIE FM and RIRE & CHANSONS brands are valued as assets in the consolidated balance sheet for insignificant amounts. Other intangible assets Other intangible assets primarily correspond to software and pre-production costs for the company NTCA Productions. Investments totalled million in 2012, including million for NTCA Productions SAS, the company which produces the musical "1789, les Amants de la Bastille". 134

136 NOTE 3 - PROPERTY, PLANT AND EQUIPMENT Year-on-year changes in the gross values and amortisation of property, plant and equipment can be broken down as follows: FY /12/2011 Acquisitions and increases Disposals and reductions Other changes Reclassifications 1 31/12/2012 Land 19, (21) 19,851 Buildings 38, (71) ,467 Technical installations, plant and tools 139,341 11,762 (1,929) ,888 Property, plant and equipment in progress 3, (16) (2,224) 2,554 Advances and prepayments (349) 875 Other fixed assets 62,897 6,531 (2,130) 2 1,064 68,364 Gross value 265,133 20,460 (4,167) 126 (553) 280,999 Land 3 3 Buildings 21,192 1,532 (27) ,047 Technical installations, plant and tools 94,246 10,860 (1,666) 123 (415) 103,148 Advances and prepayments 126 (126) Other fixed assets 28,389 6,110 (2,114) 3 (193) 32,195 Depreciation 143,956 18,376 (3,807) 126 (258) 158,393 Net value 121,177 2,084 (360) (295) 122,606 1 With a corresponding entry under intangible assets FY /12/2010 Acquisitions and increases Disposals and reductions Other changes Reclassifications 1 31/12/2011 Land 19, (12) 27 19,862 Buildings 38, (62) 2 (62) 38,340 Technical installations, plant and tools 123,372 16,178 (1,959) 20 1, ,341 Property, plant and equipment in progress 4,442 2,648 (2) (3,263) 3,825 Advances and prepayments Other fixed assets 59,596 10,353 (8,823) 6 1,765 62,897 Gross value 246,105 29,661 (10,858) ,133 Land 3 3 Buildings 19,418 1,898 (62) 1 (63) 21,192 Technical installations, plant and tools 86,101 10,169 (1,844) 20 (200) 94,246 Advances and prepayments Other fixed assets 31,566 5,301 (8,798) ,389 Depreciation 137,088 17,494 (10,704) ,956 Net value 109,017 12,167 (154) ,177 1 With a corresponding entry under intangible assets Acquisitions in 2012 came to million (2011: million), including: million (2011: 22,017 million) relating to the Broadcasting division (primarily towercast SAS), 6,580 million (2011: 5,065 million) relating to NRJ Audio SAS. 135

137 NOTE 4 NON-CURRENT FINANCIAL ASSETS 4.1. Breakdown of changes Non-current financial assets saw the following changes from one year to the next: FY 2012 Available-for-sale financial assets 12/2011 Acquisitions Increases Disposals Reductions Changes in scope Other Translation differential 12/2012 3,426 2,550 (684) 10 5,302 Loans and current accounts 11,291 1,769 (368) 16 12,708 Guarantee deposits (136) 889 Other 1, (642) Other non-current financial assets 13,242 2,116 (1,146) ,249 Gross value 16,668 4,666 (1,830) ,551 Available-for-sale financial assets 3, (668) 2,537 Loans and current accounts 5, ,134 Guarantee deposits 6 6 Other Other non-current financial assets 6, ,675 Depreciation 9, (668) 9,212 Net value 7,090 4,364 (1,162) ,339 FY 2011 Available-for-sale financial assets 12/2010 restated (a) Acquisitions Increases Disposals Reductions Changes in scope Reclassifications Translation differential 12/2011 2, (662) 1,087 3,426 Loans and current accounts 10, (259) ,291 Guarantee deposits (20) 830 Other 1, (620) 7 1,121 Other non-current financial assets 13, (899) ,242 Gross value 16, (1,561) 1, ,668 Available-for-sale financial assets 2, (617) 1,087 3,145 Loans and current accounts 4, ,892 Guarantee deposits 10 (4) 6 Other Other non-current financial assets 5, (4) 35 6,433 Depreciation 8, (621) 1, ,578 Net value 7,931 (178) (940) ,090 (a) From 1 January 2011, the Group has chosen to modify the presentation of its negative capital interests in equity-consolidated companies: when loans or current account advances to associates are recorded as assets for amounts at least equivalent to the Group's share in the negative equity of the companies concerned, these are now presented under "depreciation of loans and short-term advances to associates", and no longer under "provisions" as a liability on the balance sheet. An additional provision is recorded if the Group's commitment exceeds the receivables it holds in relation to the associates. 136

138 At 31 December 2012, "available-for-sale assets" comprised the units in UCITS allocated to the NRJ GROUP liquidity agreement, for million, as well as non-consolidated shares in associated companies. At 31 December 2012, the net value of unconsolidated investments in subsidiaries recorded under "available-for-sale financial assets" came to 317,000, compared with 259,000 at year-end Since the end of 2011, during which the Group sold 5% of the capital in EURO-INFORMATION TELECOM SAS (formerly NRJ MOBILE SAS), unconsolidated investments in subsidiaries exclusively concern companies in which the Group owns less than 10% of the capital or which do not have any business. There are no unrealised capital gains to report on these securities at year-end Maturities of non-current financial assets other than available-for-sale assets FY 2012 (net amounts) No maturity Maturing in 1 to 5 years Maturing in over 5 years Total Loans and short-term advances to associates 4,648 1,926 6,574 Guarantee deposits Other non-current financial assets Total 4,700 2, ,574 FY 2011 (net amounts) No maturity 137 Maturing in 1 to 5 years Maturing in over 5 years Loans and short-term advances to associates 4, ,399 Guarantee deposits Other non-current financial assets Total 4,682 1, ,809 NOTE 5 - INVESTMENTS IN ASSOCIATES 5.1. Breakdown of changes FY 2012 Company 31/12/2011 Energy Zürich and Energy Schweiz Holding (Zürich, Switzerland) Share in earnings Changes in 2012 Dividends paid Change in scope, foreign currency translation reserve, reclassifications and other Total 31/12/2012 1,491 (212) 146 1,425 Energy Sachsen (Germany) (1) 404 (226) Vlaanderen Een (Antwerp, Belgium) (13) 13 Other (48) Total 2,410 (416) (48) 398 2,344 (1) Netzwerk Programmanbieter-gesellschaft mbh Sachsen & Co KG, Radio Elbwelle Dresden GmbH & Co KG, Radiowelle Zwickau GmbH & Co. Betriebs KG, 7010 Radio Leipzig GmbH & Co KG In 2012, the Group did not identify any significant indicators of additional goodwill impairment for associates. FY 2011 Company 31/12/2010 Energy Zürich and Energy Schweiz Holding (Zürich, Switzerland) Share in earnings Changes in 2011 Dividends paid Change in scope, foreign currency translation reserve, 31/12/2011 reclassifications and others ,404 Energy Sachsen (Germany) 778 (215) (159) 404 Vlaanderen Een (Belgium) (397) 397 Other (15) ,305 (165) (15) 285 2,410

139 5.2 Significant figures relating to affiliates The following tables present a summary of financial information relating to significant investments in associated undertakings (data on a 100% basis, taken from the unconsolidated financial statements drawn up in accordance with accounting principles for the country concerned): In thousands of currency unit 31/12/ /12/2011 Company Currency Total assets Total liabilities (excluding net position) Total net position Total assets Total liabilities (excluding net position) Total net position Energy Zürich (Switzerland) CHF 10,480 6,589 3,891 13,669 9,791 3,878 Energy Schweiz Holding (Switzerland) Netzwerk Programmanbietergesellschaft mbh Sachsen & Co KG (Germany) CHF 1,099 1,500 (401) 6,049 5, EUR 1,883 9,913 (8,030) 1,931 9,482 (7,551) Vlaanderen Een (Belgium) EUR 4,914 11,228 (6,314) 4,004 10,168 (6,164) In thousands of currency unit 31/12/ /12/2011 Company Currency Revenues Net income Revenues Net income Energy Zürich (Switzerland) CHF 3, , Energy Schweiz Holding (Switzerland) CHF 15 (685) 1,800 (16) Netzwerk Programmanbietergesellschaft mbh Sachsen & Co KG (Germany) EUR 2,246 (479) 2,736 (409) Vlaanderen Een (Belgium) EUR 4,941 (150) 8,774 (1,587) NOTE 6 INVENTORIES Year-on-year changes in inventories are broken down as follows: FY /12/2011 Change 31/12/2012 Television business 60, ,266 Other inventories Gross value 60, ,361 Television business Other inventories 23 (4) 19 Depreciation ,016 Net value 59, ,345 FY /12/2010 Change 31/12/2011 Television business 59, ,372 Other inventories 72 (2) 70 Gross value 59, ,442 Television business Other inventories 28 (5) 23 Depreciation Net value 58, ,

140 NOTE 7 - TRADE AND OTHER RECEIVABLES Net value 31/12/ /12/2011 Trade receivables and related Note , ,861 Tax (excluding corporate income tax) and employee-related receivables 20,085 18,749 Other receivables 24,513 6,761 Deferred charges 3,386 2,703 Total trade and other receivables 165, ,074 NOTE 8 - CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise the following items: Net value 31/12/ /12/2011 Time deposits and accounts 1 50,258 50,084 UCITS units and shares 14,825 27,335 Other cash items 19,680 17,653 Cash and cash equivalents 84,763 95,072 1 : including accrued interest During 2012, in view of developments with the debt crisis in Europe, the Group decided to sell off all its shares and units in UCITS invested in bonds issued primarily by the French and German States, and to invest a significant percentage of its cash in time accounts and deposits with leading French banks. NOTE 9 - SHAREHOLDERS' EQUITY 9.1. Share capital Number of shares Number of shares outstanding Number of treasury shares Number of shares comprising the share capital At 1 January ,511,524 3,574,506 83,086,030 Treasury share buybacks 69,986 (69,986) Treasury share cancellations (2,004,495) (2,004,495) At 31 December ,581,510 1,500,025 81,081,535 During its meeting on 29 August 2012, the Board of Directors decided to: change the allocation of 2,004,495 treasury shares initially allocated for stock options in order to allocate them to the cancellation objective, as authorised for the share buyback programme approved at the Combined General Meeting on 10 May 2012, reduce the share capital by 20, by cancelling 2,004,495 treasury shares allocated for cancellation, in accordance with the authority delegated to the Board of Directors by the General Meeting of 10 May At 31 December 2012, the share capital represented 810,815.35, split into 81,081,535 shares with a par value of 0.01, including 66,265,275 shares with double voting rights, 13,316,235 shares with single voting rights and 1,500,025 treasury shares with no voting rights Treasury shares and share buyback programme Treasury shares are held under the authorisation given to the Board of Directors by the General Shareholders' Meeting on 10 May This authorisation, valid for an 18-month period, is capped at 10% of the number of shares comprising the share capital, adjusted where appropriate to take into account any increases or reductions in the share capital that may occur during the period of the share buyback programme Stock options Two stock option plans were in place at 31 December These plans, awarded to selected employees of the Group by the Board of Directors, pursuant to the authority granted to it by the General Meeting of 27 June 2008, were respectively set up on 15 September 2008 (Plan No. 2) and 14 September 2009 (Plan No. 3). 139

141 The main characteristics of these plans are as follows: Plan No.2 Plan No. 3 Initial exercise price Exercise price at 31 December 2012 (1) Total initial number of shares that may be purchased 906, ,000 o/w initial number awarded: - with no performance conditions 303,000 80,000 - with performance conditions (2) 603, ,000 Stock options outstanding at year-start 882, ,000 Adjustment made in accordance with Article L.225 R of French commercial code 113,437 25,721 Number of stock options exercised / expired / surrendered during the year - - Stock options remaining at year-end 995, ,721 of/w: - with no performance conditions 341,974 90,289 - with performance conditions (2) 653, ,432 Starting date for exercising options - with no performance conditions 16/09/ /09/ with performance conditions (2) 17/04/ /04/2012 Expiry date 2 years from the starting date for exercising options (1) A dividend payment drawn from the 'issue premium' account was made in May The exercise price for stock options that may be purchased under these plans has been reduced from 7.71 (exercise price at 31 December 2011) to (2) The performance conditions linked to current EBIT for 2009, 2010 and 2011 were all achieved. The following amounts in respect of these stock option plans were recognised as expenses: Total Model applied and assumptions made: The cost incurred by the stock option plans has been calculated using the binomial model and the following assumptions in force on the date when the exercise price was modified for shares (see above). Reference price Exercise price Expected volatility Vesting period Risk-free rate Payout rate Staff turnover rate Unit fair value (1) % 0.3 years 0.40% 3% 6% 2.17 (1) 0.46 for securities resulting from the adjustment made in accordance with Article R of the French commercial code 9.4. Dividends The Combined General Meeting of NRJ GROUP shareholders, held on 10 May 2012, agreed to pay out a total dividend of 24,925,809, or 0.30 per share, drawn from the 'issue premium' account. Note that treasury shares do not qualify for dividends. NOTE 10 - PROVISIONS 31/12/ /12/2011 Provisions for severance pay on retirement 4,758 3,496 Non-current provisions 4,758 3,496 Provisions for contingencies 10,888 12,425 Provisions for expenses Provisions relating to associated undertakings 134 Current provisions 11,275 13,137 Total provisions 16,033 16,

142 10.1 Change in provisions Year-on-year changes in provisions can be broken down as follows: FY /12/2011 Additions Reversals used 1 Reversals not used 2 Other changes 31/12/2012 Provisions for litigation 7,354 4,298 (1,323) (3,222) 7,107 Other provisions for contingencies 5,071 1,073 (94) (2,269) 3,781 Provisions for contingencies 12,425 5,371 (1,417) (5,491) 10,888 Provisions for severance pay on retirement 3, (85) (8) ,758 Provisions for expenses (192) (378) 253 Provisions relating to associated undertakings Provisions for expenses 4, (277) (386) 1,055 5,145 Total provisions 16,633 5,916 (1,694) (5,877) 1,055 16,033 1 with full corresponding entries in the expenses account 2 without corresponding entries in the expenses account 3 actuarial differences recognised under other comprehensive income items' FY /12/2010 Additions Reversals used 1 Reversals not used 2 Other changes 31/12/2011 Provisions for litigation 10,290 1,972 (2,697) (2,212) 1 7,354 Other provisions for contingencies 6, (626) (1,509) 5,071 Provisions for contingencies 16,963 2,505 (3,323) (3,721) 1 12,425 Provisions for severance pay on retirement 2, (11) (9) ,496 Provisions for expenses (182) (238) 712 Provisions for expenses 3, (193) (247) 511 4,208 Total provisions 20,451 3,154 (3,516) (3,968) ,633 1 with full corresponding entries in the expenses account 2 without corresponding entries in the expenses account 3 actuarial differences recognised under 'other comprehensive income items' Provisions for litigation The Group is involved in a number of inspections, lawsuits or disputes in the ordinary course of its business. The expenses that may arise from these cases, lawsuits or disputes, and which are considered likely to occur by the Group and its advisors, have had sufficient provisions made to cover them Provisions for severance pay on retirement Main actuarial assumptions: 31/12/ /12/2011 Discount rate % 4.30% Annual wage growth rate Determined by age bracket Determined by age bracket Mortality rates applied INSEE 06/08 H - INSEE 06/08 F INSEE 06/08 H - INSEE 06/08 F Social security rate 43.00% 43.00% 1 IBOXX rate for AA-rated company bonds in the eurozone, adjusted for the duration of the Group's commitments. The turnover rate applied for calculating the provision at 31 December 2012 is identical to that from 31 December A 0.5 basis point reduction in the discount rate would result in a 435,000 increase in commitments. In accordance with the accounting principles applied by the Group, these actuarial differences would be recognised directly to equity. 141

143 Analysis of year-on-year changes 31/12/ /12/2011 Provision at beginning of year 3,496 2,602 Cost of benefits provided during the year Financial costs (accretion expense) Amortisation of past service cost 3 3 Other (56) Expense recorded during the year Actuarial losses (gains) generated during the year and recorded under other comprehensive income items Benefits paid during the year (85) (11) Provision at year-end 4,758 3,496 1 Of which, experience-related adjustments: 86,000 (2011: 193,000) These commitments are not covered by dedicated assets. NOTE 11 FINANCIAL LIABILITIES RELATING TO FINANCING ACTIVITIES Breakdown of changes Financial liabilities relating to financing activities underwent the following changes during the year: FY /12/2011 Borrowings drawn Borrowings repaid Changes in scope Other changes 31/12/2012 Other borrowings (166) 955 1,812 Borrowings relating to finance lease agreements 11 (2) 9 Guarantees received Non-current financial liabilities (168) 955 1,846 Loans from credit institutions 150 (150) Borrowings relating to finance lease agreements 5 (2) 3 Bank overdrafts 138 (137) 1 Other current financial liabilities 6 (6) Guarantees received 1 1 Current financial liabilities (152) (6) (137) 5 Financial liabilities (320) 949 (137) 1,851 FY /12/2010 Borrowings drawn Borrowings repaid Other changes 31/12/2011 Other borrowings 903 (250) 653 Guarantees received Non-current financial liabilities 906 (250) Loans from credit institutions (238) Bank overdrafts 273 (135) 138 Other current financial liabilities 109 (103) 6 Current financial liabilities (238) (238) 144 Financial liabilities 1, (488) (220)

144 11.2. Maturity schedule for financial liabilities relating to financing activities The maturity of non-current financial liabilities relating to financing operations can be broken down as follows: FY 2012 No maturity Maturing between 1 and 5 years Maturing in over 5 years Sundry borrowings and debt 1,812 1,812 Borrowings relating to financing agreements 9 9 Guarantees received Non-current financial liabilities 4 1,842 1,846 Total FY 2011 No maturity Maturing between 1 and 5 years Maturing in over 5 years Sundry borrowings and debt Guarantees received Non-current financial liabilities Total Current financial liabilities relating to financing activities are due in less than one year. NOTE 12 - TRADE AND OTHER PAYABLES Breakdown of changes 31/12/ /12/2011 Trade payables and related 55,658 56,325 Tax (excluding corporate income tax) and employee-related payables 64,842 67,124 Other payables 17,657 16,744 Deferred income 9,435 8,087 Trade and other payables 147, , Maturity schedule for trade payables and related The maturity of trade payables and related, excluding trade payables linked to dissimilar barters, can be broken down as follows: FY 2012 Not yet due or due within 30 days Due in 30 to 90 days Due in more than 90 days Trade payables and related 41,925 4,811 3,443 50,179 Trade payables for dissimilar barters 5,479 Total 55,658 Total FY 2011 Not yet due or due within 30 days Due in 30 to 90 days Due in more than 90 days Trade and other payables 39,408 3,100 5,780 48,288 Trade payables for dissimilar barters 8,037 Total 56,325 Total 143

145 NOTE 13 - DEFERRED TAX ASSETS AND LIABILITIES FY 2012 Source Deferred tax on OCI Translation differential and other Assets 31/12/ /12/2011 Deferred tax on Liabilities Assets income Liabilities NOSTALGIE brand 15,747 15,747 Potential repayment of tax savings 1 21,209 21,209 CVAE (123) 245 Tax loss carryforwards 5, ,962 Retirement pay (1,204) (118) (317) 14 (1,625) Other (net) (2,518) (1,313) 60 (3,771) Deferred tax 5,202 33,602 (1,121) (317) 193 5,036 31, Under the consolidated taxable income system, rescinded on 1 January 2011, potential repayments of tax savings totalled 21,209,000. Moreover, under the consolidated taxable income system, consolidated income for 2010 has been subject to an inspection by the French tax authorities since March The French finance bill for 2010 introduced the CVAE contribution for enterprise added value, classed by the Group as corporate income tax from 1 January In accordance with IAS 12, this classification led to the recognition at 31 December 2009 of deferred tax relating to taxable temporary differences at that date, reversed as the expense is recognised. FY 2011 Source Deferred tax on reserves Translation differential and other Assets 31/12/2011 NOSTALGIE brand 15,747 15,747 Potential repayment of tax savings 1 21,209 21,209 CVAE (122) 368 Tax loss carryforwards (5,142) (60) 5,202 Retirement pay (893) (135) (176) (1,204) Other (net) (1,475) (1,059) 16 (2,518) Deferred tax 35,078 (6,458) (176) 44 5,202 33, Under the consolidated taxable income system, rescinded on 1 January 2011, potential repayments of tax savings totalled 21,209, The French finance bill for 2010 introduced the CVAE contribution for enterprise added value, classed by the Group as corporate income tax from 1 January In accordance with IAS 12, this classification led to the recognition at 31 December 2009 of deferred tax relating to taxable temporary differences at that date, reversed as the expense is recognised. NOTE 14 CURRENT TAX ASSETS AND LIABILITIES The change over the year can be broken down as follows: FY /12/ /12/2012 Payables Net payments Expense for the year Other 1 31/12/2010 Deferred tax on Liabilities Assets income Liabilities Receivables Receivables Payables Tax due (excluding CVAE) 31 5,127 (26,865) 22,526 (2,184) 2,907 1,480 C.V.A.E (3,511) 3,288 (2) Total 76 5,387 (30,376) 25,814 (2,186) 3,136 1,699 1 The 'Other changes' item primarily reflects the tax effect relating to provisions on treasury shares recorded in the unconsolidated financial statements being classed as equity. 144

146 FY /12/ /12/2011 Receivables Payables Net payments Expense for the year Other 1 Receivables Payables Tax due (excluding CVAE) 3,931 (20,537) 22,531 (830) 31 5,127 C.V.A.E (3,320) 3, Total 67 4,264 (23,857) 25,800 (830) 76 5,387 1 The 'Other changes' item primarily reflects the tax effect relating to provisions on treasury shares recorded in the unconsolidated financial statements being classed as equity NOTES TO THE INCOME STATEMENT NOTE 15 - STAFF COSTS Notes 31/12/ /12/2011 Salaries paid to staff (75,136) (76,594) Social security charges (30,125) (29,648) Employee profit sharing (4,212) (4,776) Costs relating to stock option plans Note 9.3 (971) (629) Costs relating to retirement pay Note 10.2 (426) (394) Other staff costs (1,313) (1,415) Staff costs (112,183) (113,456) NOTE 16 - EXTERNAL COSTS 31/12/ /12/2011 Purchases and changes in inventories (49,358) (45,379) General sub-contracting (29,977) (27,960) Fees (11,488) (10,905) Leasing and service charges (13,380) (10,585) Advertising and public relations (3,994) (3,463) Services provided (17,501) (19,373) Other expenses (32,904) (31,853) Total other external costs (109,244) (104,139) External costs (158,602) (149,518) NOTE 17 - NET DEPRECIATION, AMORTISATION AND PROVISIONS 31/12/ /12/2011 Depreciation and amortisation of property, plant & equipment and intangible assets (23,975) (20,898) Net impairment provisions on current assets 273 2,185 Net other provisions Net depreciation, amortisation and provisions (23,187) (18,415) NOTE 18 - OTHER OPERATING INCOME AND EXPENSES 31/12/ /12/2011 Royalties and copyright fees (SACEM, SPRE, etc.) (31,170) (30,138) Other income and expenses (4,994) (5,931) Other operating income and expenses (36,164) (36,069) 145

147 NOTE 19 OTHER NON-RECURRING OPERATING INCOME AND EXPENSES 31/12/ /12/2011 Other non-recurring operating income 320 1,042 Other non-recurring operating expenses (433) (78) Other non-recurring operating income and expenses (113) 964 In 2012, other non-recurring operating income and expenses primarily corresponded to net income from the sale of property, plant and equipment and intangible assets, as well as sundry income and expenses not directly related to operations. In 2011, this item concerned a reversal of provisions for contingencies not directly linked to operations, in addition to net income from the sale of property, plant and equipment and intangible assets. NOTE 20 - CORPORATE INCOME TAX Detailed breakdown 31/12/ /12/2011 Tax due Note 14 (25,814) (25,800) Deferred tax Note 13 1,121 6,458 Corporate income tax (24,693) (19,342) 20.2 Rationalisation of the tax expense The income tax charge breaks down as follows: 31/12/ /12/2011 Income from consolidated companies before corporate income tax and goodwill impairment 63,948 65,354 Current income tax rate applicable to parent company 36.10% 36.10% Theoretical income tax charge (23,085) (23,593) Effect of differences in tax bases and permanent differences 1, Effect of adjustments relating to previous financial years 587 (99) CVAE contribution, net of tax (2,069) (1,966) Prior losses used and not capitalised in previous years 904 1,452 Losses for the year not activated (2,748) (2,511) Impact of exit from the Consolidated Taxable income system, excl. impacts of losses 1,811 Activation of deferred tax on tax loss carryforwards arising from previous financial years 5,142 Impact of tax rate changes 155 Impact of different tax rates (rates for foreign subsidiaries) 106 (183) Other Actual income tax charge recognised (24,693) (19,342) Effective tax rate 38.61% 29.60% NOTE 21 - SHARE IN INCOME OF ASSOCIATES 31/12/ /12/2011 Energy Zurich and Energy Schweiz Holding (Switzerland) (212) 417 Energy Sachsen (Germany) (1) (226) (215) Vlaanderen Een (Belgium) (13) (397) Other Share in income of associates (416) (165) (1) Netzwerk Programmanbieter-gesellschaft mbh Sachsen & Co KG, Radio Elbwelle Dresden GmbH & Co KG, Radiowelle Zwickau GmbH & Co. Betriebs KG, 7010 Radio Leipzig GmbH & Co KG 146

148 NOTE 22 - EARNINGS PER SHARE 31/12/ /12/2011 Net income attributable to shareholders (Group) 37,099 45,560 Loss or profit attributable in respect of discontinued operations Net income attributable to shareholders in respect of continuing operations 37,099 45,560 Weighted average number of shares (excluding treasury shares) used to calculate basic earnings per share 79,441,034 80,523,805 Total number of options issued (including non-dilutive options) 1,221,158 1,082,000 Number of shares to add to reflect dilutive effect - - Weighted average number of shares (excluding treasury shares) adjusted for dilutive effect 79,441,034 80,523,805 Net income (Group share) per share (in ) Net income (Group share) per share from continuing operations (in ) Diluted net income (Group share) per share (in ) Diluted net income (Group share) per share from continuing operations (in ) NOTES TO THE CASH FLOW STATEMENT NOTE 23 - NET DEPRECIATION, AMORTISATION AND PROVISIONS 31/12/ /12/2011 Goodwill impairment Note Net depreciation and amortisation intangible fixed assets Note 2 5,599 3,455 Net depreciation and amortisation on property, plant and equipment Note 3 18,376 17,494 Net provisions for impairment of non-current financial assets Note 4 (608) (574) Net additions to (reversals of) provisions (1,655) (4,044) Net depreciation, amortisation and provisions 22,710 16,331 NOTE 24 - CHANGES IN WORKING CAPITAL REQUIREMENT The year-on-year change in current assets and liabilities constituting the working capital requirement (WCR) net of impairment provisions, excluding merger flows and translation differentials, is as follows: 31/12/ /12/2011 Change in inventories Change in trade receivables and related (7,833) 722 Change in trade payables and related 791 8,984 Change in other current receivables and payables 20,022 (10,366) Change in working capital requirement 13, NOTE 25 - INVESTMENT TRANSACTIONS EXCLUDING SHARES OF CONSOLIDATED COMPANIES Acquisitions of non-current assets, excluding shares of consolidated companies, can be broken down as follows: Acquisitions of non-current financial assets (excluding shares of consolidated companies) 147 Note 31/12/ /12/2011 Acquisitions of goodwill Note 1 87 Acquisitions of intangible assets Note 2 6,274 3,561 Acquisitions of property, plant and equipment Note 3 20,460 29,661 Change in payables to suppliers of intangible fixed assets, property, plant and equipment 421 (85) Subtotal 27,242 33,137 Acquisitions of non-current financial assets Note 4 4, Change in payables on non-current financial assets 5 Subtotal 4, ,913 33,921

149 NOTE 26 - NET RECURRING FREE CASH FLOW Net recurring free cash flow comprised the following items: 31/12/ /12/2011 Term deposits and accounts 50,258 50,084 UCITS units and shares 14,825 27,335 Other cash items 19,680 17,653 Cash and cash equivalents Note 8 84,763 95,072 Bank overdrafts Note 11.1 (1) (138) Net recurring free cash flow 84,762 94,

150 OTHER INFORMATION NOTE 27 - MANAGEMENT OF FINANCIAL RISKS By virtue of its activities, the Group is exposed to various types of financial risk: market risks: exchange rate risk, interest rate risk, stock market risk; credit and counterparty risks; liquidity risk MARKET RISKS EXCHANGE RATE RISK By virtue of its international activities, the Group is exposed to fluctuations in exchange rates, which may impact its earnings or its shareholders' equity. Since this risk is currently limited, the Group does not use any exchange rate risk hedging instruments. Furthermore, through the geographical diversification of its activities, the Group is exposed to the conversion risk, i.e. its balance sheet and income statement are sensitive to variations in exchange rates when consolidating the accounts of its foreign subsidiaries outside the eurozone: Swedish, Norwegian and Swiss subsidiaries. Share of consolidated revenues and operating assets resulting from the conversion of non-euro currencies: 31/12/2012 Total Revenues excluding dissimilar barters Share of noneuro % of total 392,959 1, % Segment assets 425,790 1, % 31/12/2011 Total Revenues excluding dissimilar barters Share of noneuro % of total 377,452 2, % Segment assets 423,486 1, % INTEREST RATE RISK As the Group has virtually no debt, it has no interest-rate risk hedging instruments. In terms of assets, time deposits and accounts classed as "cash equivalents" benefit from a fixed rate of interest, progressive fixed rates or variable interest, and their repayment may be requested at any time without any penalties STOCK MARKET RISK In terms of investments, the Group has a policy favouring security. Within this framework, the investment of cash surpluses is not exposed to stock market risk. At 31 December 2012, NRJ GROUP held 1,500,025 treasury shares, with a total value of 10,739,000. As indicated in "Treasury shares", treasury shares are deducted from shareholders equity in the consolidated accounts CREDIT AND COUNTERPARTY RISK Credit and counterparty risk represents the risk of financial loss for the Group if a creditor or counterparty to a financial instrument were to breach its contractual obligations FINANCIAL INVESTMENTS Time deposits and accounts, classed on the consolidated balance sheet as "cash and cash equivalents", can be converted at any time into a known amount of cash. They have been taken out with leading French banks. UCITS units, also presented under "cash and cash equivalents", concern "money market" and "short-term money market" category UCITS as defined by the AMF. These are euro UCITS invested in instruments whose investment strategy is geared towards short-term securities and some of the market's top-rated issuers. With a view to diversifying, the Group holds a maximum of 5% of the fund's net assets (or, as relevant, up to 5% of the master fund's net assets when this concerns a feeder fund). These UCITS are also held with leading custodians. In view of the profile of these financial investments, the transactions likely to generate a credit and counterparty risk for the Group are primarily linked to trade receivables OUTSTANDING TRADE RECEIVABLES The Group's exposure to credit risk should be considered with reference to the individual characteristics of its various advertisers. For all activities combined, the contribution of the Group's main clients to consolidated revenues excluding dissimilar barters is as follows: At 31 December 2012, outstanding trade receivables from operations generated by the French entities came to a net total of 105,805,000, representing 90.3% of the net amount of outstanding trade receivables. The policies adopted by the Group's advertising agencies in France concerning the management of trade receivables risk are as follows: 31/12/ /12/2011 Weighting of main client 1.8% 2.2% Weighting of 5 main clients 9.0% 9.5% Weighting of 10 main clients 16.7% 16.7% NRJ GLOBAL SAS (national advertising agency) The clients of NRJ GLOBAL SAS are large advertisers generating significant billings. Consequently, each new client systematically undergoes a solvency investigation by EULER HERMES SFAC, an insurance company with which NRJ GLOBAL SAS has signed an ad hoc contract; in addition, as required, additional checks are carried out by the company URIOS. In addition, advance payments may be requested from certain clients. In the event of a client default, NRJ GLOBAL SAS recovers a percentage of its debt up to the maximum limit of its 149

151 cover and according to the terms of its contract with EU- LER HERMES SFAC. REGIE NETWORKS SAS (local advertising agency) Due to the large number and the type of local advertisers, REGIE NETWORKS SAS does not rely on customer credit insurance, but uses specific software to help manage client risk. For special operations, which are considered more risky, an advance payment is systematically requested. Generally, both in France and in other countries, the Group does not use securitisation and does not sell its receivables MAXIMUM EXPOSURE TO CREDIT AND COUNTERPARTY RISK The net book value of financial assets represents the maximum credit and counterparty risk exposure:. In million euros 31/12/ /12/2011 Non-current financial assets 10,339 7,090 Current financial assets 523 Trade and other receivables 165, ,074 Cash and cash equivalents 84,763 95,072 Total financial assets 260, , RECEIVABLES MATURITY The maturity of trade receivables, excluding trade receivables relating to dissimilar barters, can be broken down as follows: Not yet due or due within 30 days 31/12/ /12/2011 Due in 30 to 90 days Due in more than 90 days Total Not yet due or due within 30 days Due in 30 to 90 days Due in more than 90 days Gross value 85,679 26,787 2, ,173 96,978 13,141 9, ,944 Depreciation (4,239) (4,965) Net value 110, ,979 Receivables on dissimilar barters 6,264 9,882 Trade receivables 117, ,861 Total The assessment of the risk incurred by the Group in relation to the item 'Trade and other receivables' with a view to the possible recognition of depreciation is described in LIQUIDITY RISK Liquidity risk corresponds to the risk of the Group struggling to honour its commitments relating to financial liabilities to be cleared against cash or another financial asset. The schedule for non-current financial liabilities is presented in Note 11.2 and the schedule for trade payables is presented in Note The Group's net recurring free cash flow (see Note 26) enables it to meet its non-current financial liabilities, as well as the debts taken out in relation to its trade payables and other debts owed to creditors. In addition, due to the absence of derivative financial instruments, the Group considers that it is not exposed to any liquidity risk. 150

152 NOTE 28 - AVERAGE HEADCOUNT The Group's weighted average headcount (1) underwent the following changes during the year: 31/12/ /12/2011 Executive grade 1,028 1,032 Administrative and non-executive staff Average headcount 1,770 1,749 (1) Staff from joint ventures (six companies employing personnel) are recognised for the percentage held by the Group, while staff from associates are not taken into consideration. The regional breakdown of this headcount is as follows: 31/12/ /12/2011 France 1,439 1,401 Rest of world Average headcount 1,770 1,749 NOTE 29 - RELATED PARTY TRANSACTIONS The Group's related parties are the joint ventures, associates, members of the Board of Directors which the shareholder controlling the company is part of, as well as their immediate families RELATED COMPANIES Related companies, joint ventures and associates, are primarily entities operating in the radio business in France or abroad for which the Group may be required to: provide all or part of their funding and as such, invoice financial interest at standard market rates. In this way, as part of the development of NOSTALGIE (Belgique) SA in Flanders, RADIO NOSTALGIE SAS granted a 1,250,000 principal loan to its joint-venture, with a balance of 975,000 at 31 December After taking into consideration the proportionate consolidation of NOSTALGIE (Belgique) SA for 50%, this loan is recorded as an asset for the Group for a total of 487,500. In addition, NOSTALGIE (Belgique) SA granted its Flemish subsidiary VLAANDEREN EEN, consolidated on an equity basis, a loan that is recorded as an asset for the Group for a gross total of 2,025,000 ( 1,925,000 at 31 December 2011). Furthermore, in 2009, NRJ HOLDING SUISSE SA granted a 2,300,000 Swiss franc loan to ENERGY ZÜRICH AG, which is 49%-owned by the Group and accounted for by the equity method. At 31 December 2012, this loan, now granted by NRJ SAS following its acquisition on 29 June 2012, was still in place, recorded as an asset for 1,905,000. Various German subsidiaries within the Group also granted a gross total of 5,628,000 in advances ( 5,445,000 at 31 December 2011) to the German associates operating in the Saxony Region and consolidated on an equity basis. Its purpose is to: provide assistance in the areas of music programming, branding and communication and as such invoice the corresponding services, provide administrative services in respect of legal, financial or human resources advice and, as such, invoice management fees. 151

153 The following non-current financial assets, current debts and receivables, operating income and expenses, and financial income and expenses resulting from the flows presented above with companies that are consolidated proportionally or accounted for by the equity method and appear on the consolidated balance sheet and income statement: 31/12/ /12/2011 Gross amount Depreciation Net amount Gross amount Depreciation Net amount Non-current financial assets 10,286 (5,181) 5,105 10,292 (4,939) 5,353 Current receivables 1,625 1, Current debts (949) (958) Operating income Operating expenses (227) (404) Net financial income EXECUTIVE COMPENSATION Directors are individuals who were members of the Board of Directors at the financial year-end date or during the two financial years up to that year-end date: 31/12/ /12/2011 Total gross remuneration (1) 1,004 1,374 Post-employment benefits (2) Severance pay or termination benefits (3) N/A N/A Other long-term benefits (4) N/A N/A Share-based payments (5) (1) Remuneration, bonuses, indemnities, directors' fees and benefits in kind paid during the financial year (2) Change in provisions for severance pay on retirement: net impact of 4,000 on the income statement (2011: 2,000) and 10,000 on shareholders' equity (2011: 13,000) (3) Provision charge recorded in income statement for severance pay or termination benefits (4) Provision charge recorded in income statement for deferred salaries and conditional bonuses (5) Provision charge recorded in income statement for stock option plans N/A: not applicable The Group has not granted any loans, advances or guarantees to any executives REGULATED AGREEMENTS SINCE THE FINANCIAL YEAR-END Between the financial year-end date and the date of approval of the financial statements, the following were authorised: as decided by the Board of Directors on 21 January 2013, an amendment was signed relating to the employment contract of Mrs Maryam Salehi, Director and Vice-Chairman of General Management, setting out the terms of her fixed and variable remuneration for 2013, as decided by the Board of Directors on 19 March 2013, Mrs Maryam Salehi, Director and Vice-Chairman of General Management, was awarded exceptional remuneration in relation to

154 NOTE 30 - OFF-BALANCE SHEET COMMITMENTS 30.1 COMMITMENTS GIVEN COMMITMENTS RELATING TO OPERATIONAL ACTIVITIES FY year > 1 year and 5 years > 5 years 31/12/2012 Purchases of audiovisual rights not yet in effect and not invoiced (1) 9,981 8,364 18,345 Hosting and rental of broadcasting sites (2) 17,838 30,715 3,653 52,206 Transmission and broadcasting (3) 16,604 26,843 2,012 45,459 Operating leases (4) 5,332 5, ,275 Deposits and guarantees Other commitments TOTAL 49,938 71,746 6, ,702 FY year > 1 year and 5 years > 5 years 31/12/2011 Purchases of audiovisual rights not yet in effect and not invoiced (1) 10, ,708 Hosting and rental of broadcasting sites (2) 14,835 27,691 3,427 45,953 Transmission and broadcasting (3) 13,882 26, ,323 Operating leases (4) 4,739 5, ,662 Deposits and guarantees 108 1, ,456 Other commitments TOTAL 44,556 61,764 4, ,953 (1) Purchases of audiovisual rights not yet in effect and not invoiced These commitments relate to the purchase of audiovisual rights which have not yet come into effect or are awaiting technical approval and which have not been invoiced. They are shown net of advances and prepayments made in respect of the corresponding rights that have not yet been recorded under 'Inventories' (see section , Accounting Principles and Policies - Programmes and broadcasting rights). (2) Hosting and rental of broadcasting sites These commitments relate to site rental and hosting agreements signed with TowerCast. (3) Transmission and broadcasting These commitments relate to the supply of radio and television broadcasting services and to the leasing of satellite capacity and transponders from private companies, covering both analogue and digital broadcasts. (4) Operating leases These commitments primarily relate to real estate leases and have been valued on the basis of minimum future payments for non-cancellable operating leases that were still in effect at the financial year-end COMMITMENTS RELATING TO THE CONSOLIDATED GROUP In connection with the sale of the company 7L SNC on 30 June 2010, the Group granted a liability guarantee to the buyer, with the amount not capped. This guarantee expired on 30 June 2012, with the exception of guarantees for claims relating to taxes, parafiscal charges, duties and payroll-related charges, which will expire 60 days after the end of the statutory limitation period. Similarly, in connection with the sale of the companies NRJ NORGE AS and RADIO MELODI NORGE AS, the Group granted a liability guarantee capped at NOK 4,000,000, equivalent to 516,000, which expired at the end of December 2011, with the exception of guarantees for tax-related claims, which will expire at end-december OTHER COMMITMENTS Tax consolidation The NRJ GROUP applied million in tax loss carryforwards resulting in tax savings that may have to be repaid to the relevant subsidiaries. Individual Training Entitlement (DIF) In terms of individual training entitlements, the volume of rights acquired and not used by staff from fully and proportionately 1 consolidated French entities represented 113,720 hours at 31 December 2012, compared with 109,348 hours at 31 December ,185 hours of training were claimed in 2013 (compared with 3,469 hours in 2012). (1) The entitlements acquired by staff from joint ventures are recognised based on the percentage interest held by the Group. 153

155 30.2 COMMITMENTS RECEIVED FY 2012 < 1 year > 1 year and 5 years > 5 years 31/12/2012 Hosting agreements (1) 1,553 2, ,447 Broadcasting agreements (1) 46,929 95, ,945 TOTAL 48,482 98, ,392 (1) Commitments relating to hosting and broadcasting agreements were received by towercast SAS. In addition to these commitments, the Group has an option to buy 29.8% of the capital of the Swiss company Energy Basel AG, in which it became a shareholder with a 5.2% stake in This purchase option, which was not able to be exercised at year-end 2012, may be exercised throughout the effective duration of the concession awarded to the local radio company in which it is a shareholder, i.e. as a minimum through to 31 December In addition, the Group has made a commitment to provide current account financing for up to 777,000 Swiss francs. The Group also has an option to buy 20% of the capital of the German company Radio 93.3 MHz München GmbH. This option, which was not able to be exercised at year-end 2012, may be exercised through to 31 December Alongside this, the Group has granted an option to sell these securities, resulting in the recognition of a 1,200,000 liability at yearend 2012 in accordance with IAS 32. FY 2011 < 1 year > 1 year and 5 years > 5 years 31/12/2011 Hosting agreements (1) 1,439 2, ,846 Broadcasting agreements (1) 43, , ,921 Other commitments received TOTAL 45, , ,591 (1) Commitments relating to hosting and broadcasting agreements were received by towercast SAS. NOTE 31 - INDEPENDENT AUDITORS' FEES Independent auditors' fees recognised in the consolidated income statement for the year ended 31 December 2012 amounted to a total of 764,000 (2011: 869,000). NOTE 32 - EVENTS SINCE THE YEAR END To the Group's knowledge, no significant events have occurred since 31 December 2012 that are liable to have, or to have had in the recent past, a material impact on its financial position, earnings, business operations or assets. 154

156 NOTE 33 - LIST OF CONSOLIDATED SUBSIDIARIES, JOINT VENTURES AND ASSOCIATED COMPA- NIES AS AT 31 DECEMBER 2012 The scope of consolidation at 31 December 2012 comprised 93 entities, including 68 fully consolidated companies (FC), seven proportionally consolidated companies (PC) and 18 companies accounted for by the equity method (EQ). Company and legal form Headquarters SIREN company registration number % stake At 31 December 2012 At 31 December 2011 % control Method % stake % control Method NRJ GROUP SA Paris 16th Parent company FC Parent company FC 1- MUSIC MEDIA AND EVENTS HEADENDS AND HOLDING COMPANIES NRJ SAS Paris 16th FC FC CHERIE FM SAS Paris 16th FC FC RADIO NOSTALGIE SAS Paris 16th FC FC RIRE & CHANSONS SAS Paris 16th FC FC SW Radiodiffusion SAS Paris 16th FC NATIONAL AGENCY NRJ GLOBAL SAS Paris 16th FC FC LOCAL AGENCIES Régie Networks SAS Lyon (69) FC FC Régie Networks Languedoc- Roussillon SARL Castelnau le Lez (34) PC PC Régie Networks Léman SAS Lyon (69) FC FC NRJ NETWORK Audio Diffusion SARL Caroline SARL Maitrise Média SARL Le Puy en Velay (43) Gujan- Mestras (33) Longuenesse (62) EQ EQ EQ EQ EQ EQ Mégawest SARL Flers (61) EQ EQ Montpellier Média SARL Castelau le Lez (34) PC PC NRJ Réseau SAS Paris 16th FC FC Presse du Gard SARL Nîmes (30) PC PC Publi Média SARL Béziers (34) PC PC NOSTALGIE NETWORK Radio NOSTALGIE Réseau SAS Paris 16th FC FC Média Artois SARL Arras (62) EQ EQ Sud Com SARL CHERIE FM NETWORK Lamalou les Bains (34) EQ EQ Agrippa Diffusion SARL Nîmes (30) EQ EQ CHERIE FM Réseau SAS Paris 16th FC FC CHERIE FM Aquitaine Sud SAS Paris 16th FC FC Communication 2000 SAS Paris 16th FC FC Pacific FM Béziers SARL Béziers (34) PC PC Radio Cité SARL Lens (62) EQ EQ 155

157 Company and legal form Headquarters SIREN company registration number % stake At 31 December 2012 At 31 December 2011 % control Method % stake % control Method INTERNET ACTIVITIES e-nrj SARL Paris 16th FC FC EVENTS ACTIVITIES NRJ Entertainment SARL Paris 16th FC FC Vive la Prod SAS Paris 16th FC FC OTHER BUSINESS Cie Musicale de Diffusion SARL Paris 16th FC FC 2- SHOWS & OTHER PRODUCTIONS ACN SAS Paris 16th FC FC CLN Spectacles SAS Paris 16th FC FC NTCA Productions SAS Paris 16th FC FC NRJ Music SARL Paris 16th FC FC NRJ Publishing SARL Paris 16th FC FC 3- BROADCASTING TowerCast SAS Paris 16th FC FC Telemast Nordic OY Vantaa Finland FC FC 4- TELEVISION Boileau TV SAS Paris 16th FC FC CHERIE HD SAS Paris 16th FC FC Multi 7 SAS Saint-Denis (93) EQ EQ Multiplex Haute Définition 7 SAS Boulogne (92) EQ NRJ 12 SARL Paris 16th FC FC SMR6 SA Boulogne (92) EQ EQ Société de Télévision Locale SAS Paris 16th FC FC TELIF SAS Paris 16th FC FC TELIF REGIE SARL Paris 16th FC FC 5- OTHER NRJ Audio SAS Paris 16th FC FC NRJ Production SAS Paris 16th FC FC SCI les Studios de la Pompignane Lyon (69) FC FC NRJ Théophile 1 SAS Paris 16th FC FC MY NRJ SAS Paris 16th FC FC NOSTALGIE TV SAS Paris 16th FC FC 156

158 Company and legal form Headquarters Country At 31 December 2012 At 31 December 2011 % stake % control Method % stake % control Method 6- INTERNATIONAL BUSINESS GERMANY Radio NRJ GmbH Berlin Germany FC FC CIB Beteiligungs GmbH Berlin Germany FC FC NRJ International Operations GmbH Hamburg Germany FC FC Radio 106,9 MHz Nürnberg GmbH Nuremberg Germany FC FC Radio 97,1 MHz Hamburg GmbH Hamburg Germany FC FC Netzwerk Programmanbietergesellschaft mbh Sachsen & Co. Betriebs KG NRJ Dienstleistungs-und Vermarktungsgesellschaft Hamburg mbh NRJ Hörfunk Beteiligungs GmbH (formerly NRJ Hörfunk Bayern GmbH) Leipzig Germany EQ EQ Hamburg Germany FC Munich Germany FC FC NRJ Services & Solutions GmbH Berlin Germany FC Radio 93,3 MHz München GmbH (ex Radio 93.3 MHz München GmbH Produktion und Verbreitung von Rundfunkprogrammen) Munich Germany FC FC Radio 2000 GmbH Berlin Germany FC FC Radio Citywelle Chemnitz GmbH & Co. Betriebs KG Chemnitz Germany FC FC Radio Elbwelle Dresden GmbH & Co KG Leipzig Germany EQ EQ 7010 Radio Leipzig GmbH & Co KG Leipzig Germany EQ EQ Radio NRJ Berlin und Brandenburg GmbH Berlin Germany FC Energy Media GmbH Berlin Germany FC FC Radio4You (Th) GmbH Mainz Germany FC Radiowelle Zwickau GmbH & Co. Betriebs KG BCF Radiobetriebs- und Beteiligung Gesellschaft mbh RMR Radiobetriebs- und Beteiligungsgesellschaft mbh Radio Sound-Track Programmanbietergesellschaft für Neue Medien GmbH Frankfurt Business Radio GmbH & Co. Betriebs KG AUSTRIA Leipzig Germany EQ EQ Stuttgart Germany FC Stuttgart Germany FC FC Munich Germany FC Frankfurt Germany FC FC NRJ Radio Beteiligungs GmbH Vienna Austria FC FC N&C Privatradio Betriebs GmbH Vienna Austria FC FC Radio ID Errichtungs-, Betriebs- und Beteiligungs GmbH Vienna Austria FC FC IQ-plus Medien GmbH Graz Austria FC FC GH Vermögensverwaltungs GmbH Graz Austria FC FC Ennstaler Lokalradio Betriebs GmbH Graz Austria FC FC Privat-Radio Betriebs GmbH Graz Austria FC FC Mur-Mürztal Radiobetriebs GmbH Graz Austria FC FC 157

159 Company and legal form Headquarters Country BELGIUM % stake At 31 December 2012 At 31 December 2011 % control Method % stake % control Method NRJ Belgique SA Brussels Belgium FC FC Nostalgie SA Brussels Belgium PC PC Vlaanderen Een NV Antwerp Belgium EQ EQ Nos Energies GIE Brussels Belgium PC PC FINLAND NRJ Finland OY AB Helsinki Finland FC FC NORWAY Energy Holding Norway AS Oslo Norway FC FC SWEDEN RBBD Broadcasting AB Stockholm Sweden FC FC RBDS Broadcasting AB Stockholm Sweden FC FC RBG Broadcasting AB Stockholm Sweden FC FC RBKR Broadcasting AB Stockholm Sweden FC FC RBM Broadcasting AB Stockholm Sweden FC FC RBO Broadcasting AB Stockholm Sweden FC FC RBS Broadcasting AB Stockholm Sweden FC FC SWITZERLAND Energy Zürich AG Zürich Switzerland EQ EQ NRJ Holding Suisse SA Geneva Switzerland FC FC Energy Branding SA Geneva Switzerland FC FC Energy Schweiz Holding AG Zürich Switzerland EQ EQ 158

160 7.7 INDEPENDENT AUDITORS REPORT ON THE CONSOLIDATED FI- NANCIAL STATEMENTS Dear Shareholders, In accordance with the assignment entrusted to us by your Annual General Meeting, we hereby present our report for the financial year ended 31 December 2012, on: - the audit of the accompanying consolidated financial statements of NRJ GROUP; - the justification of our opinion; - the specific verification required by law. The consolidated financial statements were approved by the Board of Directors. Our role is to express an opinion on these financial statements based on our audit. I. Opinion on the consolidated financial statements We conducted our audit in accordance with professional standards generally accepted in France. Those standards require that we plan and perform procedures to obtain reasonable assurance that the consolidated financial statements are free from material misstatement. An audit includes an examination, using sampling or other selection methods, of evidence supporting the amounts and disclosures in the consolidated financial statements. It also includes an assessment of the accounting policies applied and of any significant estimates made, as well as an evaluation of the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements for the financial year under review, under IFRS as adopted by the European Union, provide a true and fair view of the assets, liabilities, financial position and results of the group formed by the entities included in the consolidation. II. Justification of our opinion The accounting estimates used to prepare the consolidated financial statements for the year ended 31 December 2012 were formulated in a persistently uncertain environment which makes it difficult to predict future business trends, as indicated in Note In view of these circumstances, and pursuant to Article L of the French Commercial Code regarding the justification of our opinion, we draw your attention to the following information: At the end of each financial year, the company applies an impairment test to goodwill and assets with an indefinite useful life, based on the procedures described in Note 'Impairment of intangible assets, property, plant and equipment, and investments in associates'. We examined the procedures for applying this impairment test, together with the assumptions used, and we verified that Notes and (Note 1 relating to goodwill) provide appropriate information. These assessments were made as part of our audit of the consolidated financial statements, taken as a whole, and therefore contributed to the opinion we formed, which is expressed in the first part of this report. III. Specific verification We also performed, in accordance with professional standards generally accepted in France, the specific verification required by law regarding the information provided in the Group s management report. We have no matters to report regarding the fair presentation and the consistency of this information with the consolidated financial statements. Neuilly-sur-Seine, 28 March 2013 The Independent Auditors PricewaterhouseCoopers Audit Laurent Daniel Deloitte & Associés Bertrand Boisselier 159

161 8. NRJ GROUP UNCONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2012 CONTENTS Page 8.1 BALANCE SHEET INCOME STATEMENT CASH FLOW STATEMENT NOTES TO THE ANNUAL FINANCIAL STATEMENTS

162 8.1 BALANCE SHEET ASSETS (in 000s) Notes Gross Depreciation and amortisation Net at 31/12/2012 Net at 31/12/2011 FIXED ASSETS Intangible assets Licences, patents and similar rights Notes 1 and 3 49, ,403 49,403 Property, plant and equipment Other property, plant and equipment Notes 1 and Financial assets Investments in subsidiaries Notes 1, 3 and 4 1,853,014 1,230, , ,973 Receivables from subsidiaries Notes 1 and 3 222,372 18, , ,213 Other long-term investments Notes 1 to 3 14,461 Other financial assets Notes 1 and 3 3, ,496 Total fixed assets 2,127,867 1,248, , ,050 CURRENT ASSETS Advances and prepayments on orders Trade receivables 5,080 5,080 7,495 Other receivables Note 5 6,083 6,083 10,145 Marketable securities Note 6 18,729 2,337 16,392 12,678 Cash and cash equivalents Note 7 31,321 31,321 46,099 Deferred charges Total current assets 61,352 2,337 59,015 76,547 TOTAL ASSETS 2,189,219 1,250, ,281 1,019,597 LIABILITIES AND SHAREHOLDERS' EQUITY (in 000s) Notes 31/12/ /12/2011 SHAREHOLDERS EQUITY Share capital Note Issue and contribution premiums 945, ,645 Legal reserve Retained earnings (12,298) (23,318) Profit (loss) (33,173) 9,932 Total shareholders' equity Note 9 900, ,176 PROVISIONS FOR CONTINGENCIES AND EXPENSES Provisions for contingencies 2,601 2,607 Provisions for expenses Total provisions Note 11 2,712 2,694 DEBT Bank borrowings Other borrowings Note 12 8,441 Trade payables 3,786 5,405 Tax and employee-related liabilities Note 13 26,291 33,443 Fixed asset payables and related 600 Other debt 4, Deferred income 8 Total debt 34,714 48,727 TOTAL LIABILITIES 938,281 1,019,

163 8.2 INCOME STATEMENT (1/2) (in 000s) Notes 31/12/ /12/2011 OPERATING INCOME Sales of services Note 15 20,810 22,363 Revenues 20,810 22,363 Reversals of provisions, transferred charges 1,620 2,323 Other revenues Total operating income 22,513 24,746 OPERATING EXPENSES Purchases of goods 62 Other bought-in goods and services Note 16 9,745 9,636 Taxes and duties Wages and salaries 8,201 11,239 Social-security charges 3,519 4,172 Provisions Note 11 1, Other expenses Total operating expenses 23,892 26,254 OPERATING INCOME (LOSS) (1,379) (1,508) FINANCIAL INCOME Financial income from equity interests Note Income from other marketable securities and fixed asset receivables 1,540 3,402 Other interest and similar income Reversals of provisions, depreciation and transferred charges Note 11 3,624 1,131 Foreign exchange gains 26 Net proceeds from disposals of marketable securities Total financial income 6,118 5,633 FINANCIAL EXPENSES Depreciation, amortisation and provisions Note 11 9,563 4,808 Interest and similar expenses 38, Foreign exchange losses 4 Net expenses on disposals of marketable securities 13 Total financial expenses 47,769 4,836 FINANCIAL INCOME (EXPENSE) Note 17 (41,651) 797 RECURRING INCOME BEFORE TAX (43,030) (711) 162

164 INCOME STATEMENT (2/2) (in 000s) Notes 31/12/ /12/2011 EXCEPTIONAL INCOME Exceptional income from financing transactions 70 1,664 Reversals of provisions, depreciation and transferred charges 1,076 Total exceptional income 70 2,740 EXCEPTIONAL EXPENSES Exceptional expenses on management transactions Exceptional expenses on financing transactions Total exceptional expenses 155 1,083 EXCEPTIONAL INCOME (EXPENSE) Note 18 (85) 1,657 Employee profit sharing (559) (487) Corporate income tax Notes 14 and 19 10,501 9,473 NET INCOME (33,173) 9,

165 8.3 CASH FLOW STATEMENT (in 000s) Notes 31/12/ /12/2011 Net income (33,173) 9,932 Net depreciation, amortisation and provisions (excluding depreciation for current assets) Note 11 3,889 1,065 Gains (losses) from disposals Note 18 (14) (1,529) Receivables written off Note 1 38,150 Cash flow from operations 8,852 9,468 Net operating receivables 2,273 2,721 Operating liabilities (1,415) 881 Tax and employee-related receivables (net) (2,528) (130) Tax and employee-related liabilities (7,126) (167) Current accounts (tax consolidation) 10,418 (7,539) Change in working capital requirement 1,622 (4,234) Net cash flow generated by operating activities (A) 10,474 5,234 INVESTMENT ACTIVITIES Expenditure on acquisitions of property, plant and equipment, and intangible assets (600) Disbursements relating to acquisitions of investments in subsidiaries (20) Disbursements relating to acquisitions of fixed assets (600) (20) Disposal of investments in subsidiaries 1,664 Receipts relating to disposals of fixed assets 1,664 Net change in other financial assets 11,470 (8,331) Cash flow allocated to investment activities (B) 10,870 (6,687) FINANCING ACTIVITIES Dividends paid Note 9 (23,841) (24,310) Loan issues Note 12 (8,441) 8,441 Cash flow allocated to financing activities (C) (32,282) (15,869) Impact of exchange rates (D) Change in net recurring cash (A) + (B) + (C) + (D) (10,938) (17,322) Net cash at start of year (E) 58,651 75,973 Net recurring cash at year-end (A) + (B) + (C) + (D) + (E) 47,713 58,651 Marketable securities Note 6 16,392 12,678 Time deposits Note 7 31,316 46,000 Other cash items Note Bank overdrafts (126) Total 47,713 58,

166 8.4 NOTES TO THE ANNUAL FINANCIAL STATEMENTS CONTENTS Page GENERAL INFORMATION SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR ACCOUNTING PRINCIPLES, RULES AND POLICIES NOTES TO THE BALANCE SHEET... Note 1 - Change in gross fixed assets... Note 2 - Fixed investments... Note 3 - Change in depreciation, amortisation and provisions against fixed assets... Note 4 - Table of subsidiaries and associates... Note 5 - Other receivables... Note 6 - Marketable securities... Note 7 Cash and cash equivalents... Note 8 - Breakdown of share capital... Note 9 - Changes in shareholders' equity... Note 10 - Share-based payments... Note 11 - Breakdown of provisions... Note 12 - Borrowings and other financial debt... Note 13 - Tax and employee-related liabilities... Note 14 - State - Corporate income tax NOTES TO THE INCOME STATEMENT Note 15 - Revenues... Note 16 - Other bought-in goods and services... Note 17 - Financial income... Note 18 - Exceptional income... Note 19 - Corporate income tax OTHER INFORMATION Note 20 - Debt maturity... Note 21 - Receivables maturity... Note 22 - Various items relating to subsidiaries and associates... Note 23 - Amounts payable... Note 24 - Commitments given... Note 25 - Commitments received... Note 26 - Disputes... Note 27 - Tax consolidation... Note 28 - Average headcount... Note 29 - Information on directors' remuneration... Note 30 - Individual training entitlement... Note 31 Consolidation... Note 32 - Events since the year-end

167 8.4.1 GENERAL INFORMATION NRJ GROUP is a public limited company established under French law. Its registered office is located at 22 rue Boileau, Paris, France. NRJ GROUP shares are listed on Compartment B of Euronext Paris (ISIN: FR ). The financial year of 12 months ends on 31 December of each year. The Company's annual financial statements were approved by the Board of Directors on 19 March The information below forms the notes to the financial statements for the year ended 31 December All amounts are expressed in thousands of euros, unless stated otherwise SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR Capital reduction through cancellation of treasury stock During its meeting on 29 August 2012, the Board of Directors decided to change the allocation of 2,004,495 treasury shares initially allocated for stock options in order to allocate them to the cancellation objective, as authorised for the share buyback programme approved at the Combined General Meeting on 10 May 2012, reduce the share capital by 20, by cancelling 2,004,495 treasury shares allocated for cancellation, in accordance with the authority delegated to the Board of Directors by the General Meeting on 10 May In addition, NRJ GROUP's liquidity agreement showed a net balance of 25 treasury shares at 31 December 2012, following the net sale of 69,986 treasury shares during the year, with a net value of 488,000. After taking into account all shares purchased, sold and cancelled in 2012, as detailed above, NRJ GROUP held 1,500,025 of its own shares at 31 December 2012, equivalent to 1.85% of the post-cancellation share capital, compared with 3,574,506 treasury shares at 31 December 2011, equivalent to 4.30% of the pre-cancellation share capital ACCOUNTING PRINCIPLES, RULES AND POLICIES General principles The general accounting conventions below have been applied in accordance with the principle of prudence, and in compliance with legal and regulatory requirements in France and the basic assumptions that are intended to provide an accurate picture of the company's assets and liabilities, financial position and results: going concern, consistency of accounting methods from one period to the next, independent financial years. and compliance with the general rules for preparing and presenting annual financial statements. The basic method used to value accounting entries is the historic cost method Use of estimates The preparation of the financial statements requires the management to use reasonable estimates and assumptions that may have an impact on the application of accounting policies and the amounts of the assets, liabilities, revenues and costs that appear in the financial statements, and on the information given in the notes to the financial statements. These estimates and assumptions are determined on a going concern basis using the information available at the time, previous experience and other factors considered to be reasonable in the circumstances. They are applied within the context of a persistently uncertain economic climate which makes it difficult to predict the future business outlook. The estimates and assumptions used thus serve as a basis for the exercise of the judgement required to determine the accounting values of assets and liabilities that cannot be obtained directly from other sources. Actual values may differ from the estimated values. At each year end, these assumptions and estimates are revised if the circumstances on which they were based have changed, or if new information has become available to the management. More specifically, the judgements, estimates and assumptions concern: the valuation of intangible assets acquired and that of their estimated lifespan, the valuation of investments in subsidiaries, the amount of pension liabilities, the amount of provisions for disputes Changes in methods and comparability of financial years There were no changes in methods used for the financial year ended 31 December Accounting principles and policies The accounting principles and policies applied were as follows: Intangible assets Intangible assets are initially valued at their purchase or production cost (including incidental expenses), during the financial year in which they were acquired. Amortisation costs are calculated using the straight-line method over the estimated useful life of the asset: other franchises, patents and licences: five years The NRJ brand is a non-amortisable intangible asset. At the end of each financial year, the Group estimates the present value of the brand as the higher of: (i) its fair value less selling costs; or (ii) its going concern value, determined on the basis of discounted future cash flows. If the present value determined in this way is less than the book value, an impairment is recorded for the corresponding difference. 166

168 Financial assets Investments in subsidiaries are recorded on the balance sheet at their purchase price or their subscription value, less any provisions for impairment recognised if the going concern value falls below the book value. The going concern value is determined by reference to past performance, market trends, future prospects and any other information enabling an accurate valuation to be established. The following assumptions are used to produce forecasts based on the discounted free cash flow method, which applies a discount rate after corporate income tax: Business segment 31/12/ /12/2011 DR 1 % PG 2 % DR 1 % PG 2 % Music Media and Events Television International Shows and Other Productions Broadcasting Other business Discount rate (WACC) 2 Perpetual growth rate 3 Key assumptions are identical for each country within the same region. The treasury shares corresponding to stock options that will not be exercised, as well as the treasury shares set aside for acquisitions and those intended to be used under the liquidity agreement, are classed as fixed investments on the assets side of the balance sheet (see Note 2). The corresponding shares are valued using the FIFO method (First in-first out) and a provision is calculated if the average share price over the last month of the financial year is lower than the purchase price of the treasury shares. In the statement of changes in cash flow, the treasury shares are treated as medium-term investments and accordingly are not included in free cash flow. Receivables Receivables are measured at face value. An impairment, based on an individual assessment, is applied when justified by the risk of non-recovery. Marketable securities Marketable securities other than treasury shares are valued at their purchase price. An impairment is recognised when the book value is lower than the purchase price. As buyback transactions and subscriptions are systematically realised at the year-end date, the historic cost and market value at 31 December 2012 are virtually identical. The treasury shares acquired under NRJ GROUP's share buyback programmes and intended for employees under the stock option plans in effect, are classified as marketable securities and valued using the FIFO method (First in-first out). An impairment is recognised if the average share price over the last month of the financial year is lower than the purchase price of the treasury shares. Stock options Whenever it is likely that an outflow of resources will be required in respect of stock options, a provision is recognised and is pro-rated to the rights vested since the award date. Where relevant, this provision will reflect the fact that treasury shares have been allocated to the stock option plans. For treasury shares that have been allocated from the outset to stock option plans granted to employees and recognised as marketable securities, a provision is recognised over the vesting period of the rights and will be equal to the difference between the cost price of the shares and the exercise price of the options, if this exercise price is lower than the current share price at the financial year-end date. Provisions A provision is recognised if, at the financial year-end date, the Group has a legal or implicit obligation to a third party that is likely or certain, on the date when the financial statements are drawn up, to result in an outflow of resources, whose amount can be measured reliably, in favour of said third party, without at least equivalent compensation expected from the latter after the year-end date. Provisions are reviewed at each financial year-end and, where relevant, an adjustment is made to reflect the best estimate of the corresponding obligations on the date when the financial statements are drawn up. Employee profit sharing Virtually all the French companies in which NRJ GROUP had a stake of at least 50% on 1 January benefit from the Group's employee profit sharing agreement. The method used to calculate the special reserve for profit sharing under this Group agreement is provided by law. However, the reserve determined by this method is split between all the employees of companies that have signed the agreement, whatever their financial performance, provided that employees can demonstrate a minimum length of service of three months. Exceptional income Exceptional income and expenses include exceptional items arising from ordinary business activities, as well as extraordinary items. Exceptional items from ordinary business activities are defined by their unusual nature, the size of the amounts concerned and their non-recurring nature. Pension-related liabilities The Group s statutory and contractual retirement benefits for currently employed staff comprise the termination benefits provided for by the broadcasting industry s collective bargaining agreement. The corresponding pension-related liabilities are recorded as an off-balance sheet commitment and determined on the basis of the entitlements vested as at the financial year-end, taking into account final salaries and assumptions such as discount rates and length of service within the company. Tax consolidation NRJ GROUP has opted for the tax consolidation regime, provided for in Article 223 A of the French General Tax Code. 167

169 At 31 December 2012, the tax consolidation group comprised 25 companies, the main ones being: NRJ SAS, NRJ GLOB- AL SAS, NRJ 12 SARL, TOWERCAST SAS, NRJ PRODUC- TION SAS, REGIE NETWORKS SAS, CHERIE FM SAS, RIRE & CHANSONS SAS and RADIO NOSTALGIE SAS. As the head company in the tax consolidation group, NRJ GROUP is the sole entity liable for corporate income tax on behalf of all the entities included in the group. According to the terms of the tax consolidation agreements between NRJ GROUP and its consolidated subsidiaries: each company is treated as though it were taxed separately, any tax credits or charges relating to the consolidated companies are recognised in NRJ GROUP s financial statements, if and when a company leaves the Group, NRJ Group and the exiting company mutually determine whether the latter incurred extra charges by virtue of belonging to the Group and, if so, the amount of compensation payable by NRJ Group, if such compensation is considered justified. Accordingly, pursuant to Notice no G of 12 October 2005 issued by the Emergency Committee (Comité d Urgence) of the French Accounting Board (Conseil National de la Comptabilité) relating to the conditions for the recording of provisions by parent companies benefitting from the tax consolidation regime, NRJ Group opted for the following accounting treatment: the Group will recognise a provision against the risk of having to repay tax savings on loss-making subsidiaries that subsequently become profit-making, if there is a likelihood that the Group will have to make a cash repayment, i.e. if there is an irreversible agreement to sell the subsidiary or if a formal internal decision has been taken to remove the subsidiary from the tax consolidation group, the amount of tax deficits used by NRJ GROUP that have generated tax saving that are likely to be returned to the subsidiaries in question, is subject to an information in the appendices when the cash repayment is not deemed to be probable. 168

170 8.4.4 NOTES TO THE BALANCE SHEET Note 1 - Change in gross fixed assets Gross value at 31/12/2011 Acquisitions and other increases Disposals and other reductions Reclassifications and other changes Gross value at 31/12/2012 INTANGIBLE ASSETS NRJ brand 1 49,403 49,403 Other franchises, patents and licences Total (A) 49,459 49,459 PROPERTY, PLANT AND EQUIPMENT Other property, plant and equipment 6 6 Total (B) 6 6 FINANCIAL ASSETS Investments in subsidiaries 2 1,814,864 38,150 1,853,014 Receivables from subsidiaries 3 312,136 39,950 (53,414) (76,300) 222,372 Other long-term investments 16,438 1,876 (2,364) (15,950) Other financial assets 520 2,496 3,016 Total (C) 2,143,958 44,322 (55,778) (54,100) 2,078,402 Grand total (A) + (B) + (C) 2,193,423 44,322 (55,778) (54,100) 2,127,867 1 NRJ brand The NRJ brand is recognised on the balance sheet as follows: million following the contribution made by Mr Jean-Paul Baudecroux to NRJ GROUP under the combined contribution agreement dated 8 April 2000, 19,000 relating to the acquisition of various NRJ brands prior to 1 January 2011, 600,000 concerning the 2011 acquisition of brands previously held by ENERGY BRANDING SA, a fully-owned NRJ GROUP subsidiary. 2 Breakdown of changes in investments in subsidiaries: Company Capital increase through capitalisation of receivables Reclassifications and other changes NRJ 12 SARL 36,000 36,000 BOILEAU TV SAS 2,150 2,150 Grand total 38,150 38,150 3 Breakdown of changes in receivables from subsidiaries : Capital increases through capitalisation of receivables Debt write-offs with return to better fortune clause Acquisitions and other increases Disposals and other reductions Reclassifications and other changes Of which, NRJ 12 SARL Of which, Boileau TV SAS (38,150) (36,000) (2,150) (38,150) (36,000) (2,150) Increases 39,950 31,309 5,309 Reductions a (53,414) Grand total 39,950 (53,414) (76,300) (40,691) 1,009 a Of which, 27,736,000 concerning NRJ SAS. 169

171 Note 2 - Fixed investments Fixed investments correspond to treasury shares held by NRJ GROUP: intended to be used under the liquidity agreement, intended for acquisitions. The number and gross value of these treasury shares changed as follows during the financial year: (number of shares) Number of treasury shares recorded as fixed investments at 31/12/2011 Cancellation of treasury shares through reduction in share capital For liquidity contract For external growth operations Total 70,011 2, 004,495 2,074,506 (2,004,495) (2,004,495) Shares purchased 331, ,015 Shares sold (401,001) (401,001) Net sales (69,986) (69,986) Number of treasury shares recorded as fixed investments at 31/12/ ( ) For liquidity contract For external growth operations Gross value at 31/12/ ,949 16,438 Reclassification (1) 1 Cancellation of treasury shares through reduction in share capital Total (15,950) (15,950) Shares purchased 1,876 1,876 Shares sold (2,364) (2,364) Net sales (488) (488) Gross value at 31/12/2012 Impairments at 31/12/ ,960 1,977 Additions 3,683 3,683 Reversals (17) (17) Cancellation of treasury shares through reduction in share capital Impairments at 31/12/2012 (5,643) (5,643) Net value at 31/12/

172 Note 3 - Change in depreciation, amortisation and provisions against fixed assets INTANGIBLE ASSETS NRJ brand Amount at 31/12/2011 Increases Reductions Other movements Amount at 31/12/2012 Other franchises, patents and licences Total (A) PROPERTY, PLANT AND EQUIPMENT Other property, plant and equipment 6 6 Total (B) 6 6 FINANCIAL ASSETS Investments in subsidiaries 1 1,227,891 2,159 (37) 1 1,230,014 Receivables from subsidiaries 2 19,923 1,653 (3,570) (1) 18,005 Fixed investments 3 1,977 3,683 (17) (5,643) Other financial assets Total (C) 1,250,311 7,495 (3,624) (5,643) 1,248,539 Grand total (A) + (B) + (C) 1,250,373 7,495 (3,624) (5,643) 1,248,601 Additions/reversals: financial items 7,495 (3,624) Total 7,495 (3,624) 1 Investments in subsidiaries: Impairments for the year relating to investments in subsidiaries concern BOILEAU TV SAS for 1,861,000 and ENER- GY BRANDING SA for 298,000. Since 2006, NRJ GROUP has determined the going concern value of NRJ SAS shares and compared it with their book value. Two approaches have been selected: discounted future cash flows generated by NRJ SAS and its subsidiaries, peer group comparisons, including references to recent transactions involving similar assets. Based on this method, an overall impairment of 1,200 million was recorded at 31 December The shares in RIRE & CHANSONS SAS were valued using this method and the revenue multiple method based on a multi-criteria approach. As a result of applying these methods, a million impairment was recorded at 31 December At 31 December 2012, the assumptions made for these valuations were updated, in particular to take into account different conditions in the advertising markets, the business outlook and interest rate trends. The Group did not record any additional impairment charges or reversals as a result of these updated valuations. 2 Receivables from subsidiaries: Impairments for the year relating to receivables from subsidiaries primarily concern SOCIETE DE TELEVISION LO- CALE SAS for 1,644,000. The 3,570,000 reversal of impairment charges relating to receivables from subsidiaries concerns BOILEAU TV SAS. 3 Fixed investments: see Note

173 Note 4 - Table of subsidiaries and associates Company Share capital Subsidiaries (stake greater than 50%) Shareholders equity other than share capital % equity stake Book value of securities held Gross Net Loans and advances made by the Company that have yet to be repaid Amount of deposits and pledges given by the Company 2 Revenues before taxes Profit (loss) for last financial year Dividends received by the Company during the year Detailed information NRJ SAS 10, , % 1,712, , ,777 69,641 44,210 CHERIE FM SAS 1,653 15, % 6,234 6,234 1,035 22,534 2,010 RIRE ET CHANSONS SAS 179 (16) % 38,604 10, ,046 (525) NRJ 12 SARL 15,390 (5,408) % 92,475 92,475 64,034 84,353 19,744 SOCIETE DE TELEVISION LOCALE SAS SCI LES STUDIOS DE LA POMPIGNANE 37 (18,033) 75.00% 28 18,738 3,827 (1,644) % , (31) BOILEAU TV SAS 1,297 (969) % 2, ,739 1,748 ENERGY BRANDING SA % (3) Sub-total (A) 1,852, , , General information French subsidiaries Sub-total (B) TOTAL (A) + (B) =(C) Other investments (less than 10% stake) Detailed information EURO INFORMATION TELECOM SAS 1,852, , , , % ,349 7,362 Sub-total (D) 35 Grand total (E) = (C) + (D) 1 CHF 2 No deposits or pledges given by the Company. 1,853, , ,372 Note 5 - Other receivables Note 31/12/ /12/2011 Staff and welfare agencies Tax receivables (excluding corporate income tax) State - corporate income tax Note 14 2,664 Group and associates 2,386 9,097 Other receivables Net value 6,083 10,145 Note 6 - Marketable securities Note 31/12/ /12/2011 Treasury shares Note 6.1 8,401 10,469 Other marketable securities Note 6.2 7,991 2,209 Net value 16,392 12,

174 6.1 Treasury shares The number and value of treasury shares held by NRJ GROUP and intended for employees, particularly under the stock option plans in effect, changed as follows: (number of shares) Treasury shares intended for employees Number of treasury shares held at 31/12/2011 1,500,000 1,500,000 Changes during the year Number of treasury shares held at 31/12/2012 1,500,000 1,500,000 Total Treasury shares intended for employees Net value at 31 December ,469 10,469 Impairments during the year (2,068) (2,068) Net value at 31 December ,401 8,401 Total 6.2 Other marketable securities Marketable securities comprise shares or units in euro-denominated money-market mutual funds. The changes during the year were as follows: Shares or units in euro-denominated money-market mutual funds 31/12/2011 Increases Reductions Capital gains and losses 31/12/2012 2, , , ,991 Net value 2, , , ,991 Note 7 - Cash and cash equivalents 31/12/ /12/2011 Time deposits 1 31,316 46,000 Other cash items 5 99 Net value 31,321 46,099 1 Time deposits During the second half of 2012, in view of developments with the debt crisis in Europe, the Group decided to sell off all its shares and units in UCITS invested in bonds issued primarily by the French and German States, and to invest a significant percentage of its cash in time accounts and deposits with leading French banks. Note 8 - Breakdown of share capital Number of shares Number of shares outstanding Number of treasury shares Number of shares comprising the share capital At 1 January ,511,524 3,574,506 83,086,030 Net buybacks of treasury shares 69,986 (69,986) Cancellation of treasury shares (2,004,495) (2,004,495) At 31 December ,581,510 1,500,025 81,081,535 At 31 December 2012, the share capital represented 810,815.35, split into 81,081,535 shares with a par value of 0.01, including 66,265,275 shares with double voting rights, 13,316,235 shares with single voting rights and 1,500,025 treasury shares with no voting rights. At 31 December 2012, treasury shares were held under the authorisation given to the Board of Directors by the General Shareholders' Meeting on 10 May This authorisation, valid for an 18-month period, is capped at 10% of the number of shares comprising the share capital, adjusted where appropriate to take into account any increases or reductions in the share capital that may occur during the period of the share buyback programme. 173

175 Note 9 - Changes in shareholders' equity Share capital Premiums 1 Legal reserve Retained earnings Profit (loss) for the year At 31 December , (23,318) 9, ,176 Appropriation of 2011 earnings (1,085) (3) 11,020 (9,932) Dividend payments 2 (23,841) (23,841) Capital reduction (20) (10,287) (10,307) 2012 profit (loss) (33,173) (33,173) At 31 December , (12,298) (33,173) 900,855 1 Premiums Total "Premiums" are allocated to the value of treasury shares. 2 Dividend payments The Combined General Meeting of NRJ GROUP shareholders, held on 10 May 2012, agreed to pay out a total dividend of 24,925,809, or 0.30 per share, drawn from the 'issue premium' account. Note that treasury shares do not qualify for dividends. Note 10 - Share-based payments Description of the main features of stock option plans Stock option plans granted to some of the Group's permanent employees are share purchase plans. These plans do not give holders the option of a payment in cash. Three stock option plans were granted to specific Group employees by the Board of Directors pursuant to the authority granted to it by the General Meeting of 27 June Two plans were introduced following a decision by the Board of Directors on 15 September 2008 (Plans No.1 and No.2) and a further plan was implemented following a decision by the Board of Directors on 14 September 2009 (Plan No.3). Plan No.1 became null and void in 2009 following the departure of its sole beneficiary from the Group. To exercise their options, holders must, in addition to other conditions, be an employee of the Company or one of its subsidiaries on the day that they intend to exercise the options. Information on stock options Options to subscribe to or purchase shares granted to the top ten employee recipients who are not corporate officers, and number of options exercised by these individuals Total number of options awarded and/or shares subscribed to or purchased Options granted during the financial year, by NRJ GROUP and by any company eligible to grant options, to the ten employees of NRJ GROUP, and any company included in this scope, for which the number of options granted is the highest (overall information) Options held on NRJ GROUP and companies mentioned above that were exercised during the financial year by the ten employees of NRJ GROUP and its companies, for which the number of options purchased or subscribed to is highest (overall information) NA NA 174

176 History of stock options granted The main characteristics of Plans No.2 and No.3 are as follows: Information on stock options Plan No.2 Plan No. 3 General Meeting date 27 June June 2008 Date of Board of Directors meeting 15 September September 2009 Total number of shares that may be purchased: (i) o/w number of shares which may be purchased by: - corporate officers (Maryam Salehi, Director) - top ten employee recipients (ii) o/w number awarded: - with no performance conditions - with performance conditions 906, , , , , , ,000 80, ,000 Starting date for exercising options: - Options with no performance conditions - Options with performance conditions 16/09/2012 After a period of 20 trading days following publication of results for 2011, i.e. 17 April 2012 Expiry date 2 years from the starting date for 2 years from start of fiscal year exercising options Initial exercise price Exercise price at 31 December 2012 (i) Exercise terms - with no performance conditions - with performance conditions 303,000 options that may be exercised from the starting date of the exercise period 603,000 options that may be exercised if the performance conditions for 2009, 2010 and 2011 current EBIT are met (ii) 80,000 options that may be exercised from the starting date of the exercise period 120,000 options that may be exercised if the performance conditions for 2009, 2010 and 2011 current EBIT are met (iii) Number of shares purchased NA NA Total number of stock options cancelled or declared null and void 24,000 NA Stock options outstanding at year-start 882, ,000 Adjustment made in accordance with Article R of French commercial code 113,437 25,721 Stock options remaining at year-end: 995, ,721 - with no performance conditions - with performance conditions 341, ,463 90, ,432 Value of shares used as a basis for the social contribution tax of 1% (iv) (i) Exercise price at 31 December 2012 A dividend payment drawn from the 'issue premium' account was made in May The exercise price for stock options that may be purchased under the two plans in place has been reduced from 7.71 (exercise price at 31 December 2011) to For reference, the previous two exceptional distributions carried out in May 2010 and May 2011 resulted in the following changes in the exercise prices respectively: - from 8.25 to 7.99, - then from 7.99 to (ii) Plan No. 2: performance conditions -201,000 options that may be exercised if 2009 current EBIT = or > budgeted 2009 current EBIT, -201,000 options that may be exercised if 2010 current EBIT = or > budgeted 2010 current EBIT, -201,000 options that may be exercised if 2011 current EBIT = or > budgeted 2011 current EBIT. Giving a total of 603,000 options that may be exercised. The performance conditions for Plan No. 2, as outlined above, were all satisfied. 175

177 (iii) Plan No. 3: performance conditions - 40,000 options that may be exercised if 2009 current EBIT = or > budgeted 2009 current EBIT, - 40,000 options that may be exercised if 2010 current EBIT = or > budgeted 2010 current EBIT, - 40,000 options that may be exercised if 2011 current EBIT = or > budgeted 2011 current EBIT. Giving a total of 120,000 options that may be exercised. The performance conditions for Plan No. 3, as outlined above, were all satisfied. (iv) Value of shares used as a basis for the 10% contribution tax The value of shares used as a basis for calculating the 10% contribution corresponded to their fair value determined using the binomial model, based on the following assumptions: Reference price Initial exercise price Expected volatility Risk-free rate Payout rate Staff turnover rate Unit fair value Plan No % 6 years 4.25% 3% 14% 1.56 Plan No % 5 years 2.09% 3% 0% 1.01 Note 11 - Breakdown of provisions Net amount at 31/12/2011 Additions Initial maturity Reversals used Reversals not used Other movements Net amount at 31/12/2012 PROVISIONS FOR CONTINGENCIES AND EXPENSES Other provisions for contingencies and expens- 1 es 2,694 1, ,148 2,712 Total provisions for contingencies and expenses 2,694 1, ,148 2,712 IMPAIRMENTS - investments in subsidiaries 2 1,227,891 2, ,230,014 - receivables from investments in subsidiaries 3 19,923 1,653 3,570 (1) 18,005 - fixed investments 1,977 3, (5,643) - other financial assets treasury shares 270 2,068 (1) 2,337 Total impairments 1,250,581 9,563 3,624 (5,644) 1,250,876 Grand total 1,253,275 11,053 3,948 1,148 (5,644) 1,253,588 Of which additions and reversals Additions Reversals used Reversals not used Reversals (total) Net additions Operating items 1, ,148 1, Financial items 9,563 3,624 3,624 5,939 Total 11,053 3,948 1,148 5,096 5,957 On fixed assets 7,495 3,624 3,624 3,871 Provisions for contingencies and expenses 1, ,148 1, Sub-total 8,985 3,948 1,148 5,096 3,889 On current assets 2,068 2,068 Total 11,053 3,948 1,148 5,096 5,957 1 Other provisions for contingencies and expenses Other provisions for contingencies and expenses cover potential risks valued in accordance with CRC Regulation & These are mainly risks arising from lawsuits or disputes in the Company s ordinary course of business. The expenses that may arise from these cases or disputes, and which are considered likely to occur by NRJ GROUP and its advisors, have had sufficient provisions made to cover them. 176

178 2 Impairments of investments in subsidiaries Impairments of investments in subsidiaries mainly relate to shares in NRJ SAS for 1,200,000,000, as well as shares in RIRE & CHANSONS SAS for 27,610, Impairments of receivables from investments in subsidiaries Impairments of receivables from subsidiaries primarily concern SOCIETE DE TELEVISION LOCALE SAS for 17,996,000. Note 12 - Borrowings and other financial debt 31/12/2011 Increases Reductions 31/12/2012 Borrowings from subsidiaries 8,441 (8,441) Total 8,441 (8,441) Note 13 - Tax and employee-related liabilities Note 31/12/ /12/2011 Staff and welfare agencies 4,082 6,220 Potential repayment of tax savings generated by the consolidated taxable income system 1 21,208 21,208 Tax and employee-related liabilities (excluding corporate income tax) 1,001 1,444 State - corporate income tax Note 14 4,571 Total 26,291 33,443 1 The consolidated taxable income system has been rescinded with effect from 1 January Note 14 - State - Corporate income tax 31/12/ /12/2012 Receivables Payables Net payments 1 Tax income for the year Other Receivables Payables State - corporate income tax 4,571 3,146 (10,501) 120 2,664 Total 4,571 3,146 (10,501) 120 2,664 1 Balance between the tax instalments for 2012 based on the overall profit for 2011 and paid by NRJ GROUP, parent company of the tax consolidation group, and the payments received from consolidated French subsidiaries NOTES TO THE INCOME STATEMENT Note 15 - Revenues 31/12/ /12/2011 Management fees 17,315 18,348 French royalties 1,805 1,788 International royalties Other income ,559 Revenues 20,810 22,363 1 Other revenues Other revenues for the year ended 31 December 2012 correspond to staff costs, fees and media space purchases transferred to the Group's French subsidiaries. 177

179 Note 16 - Other bought-in goods and services 31/12/ /12/2011 Subcontracting Leasing and service charges 4,423 3,899 Insurance premiums Studies and research Maintenance and repairs External staff Fees and commissions to intermediaries 2,736 3,012 Advertising and public relations Travel, assignments and entertainment Banking services Other Other bought-in goods and services 9,745 9,636 Note 17 - Financial income 31/12/ /12/2011 Net impairments of treasury shares (a) (5,734) (2,247) Capital gains (losses) on sales of treasury shares (b) 17 Treasury shares subtotal (c) = (a) + (b) (5,734) (2,230) Net impairments (net reversals of impairments) of investments in subsidiaries (d) (2,122) 897 Net reversals of impairments (net impairments) of current accounts (e) 1,918 (2,327) Receivables written off (f) (38,150) (6) Sub-total (1) (g) = (d) + (e) + (f) (38,354) (1,436) Interest on current accounts (h) 1,530 3,402 Dividends (i) Financial income from marketable securities and time deposits (j) Other financial income and expenses (k) (21) (9) Financial income (expense) (l) = (c) +(g) + (h) + (I) + (j) +(k) (41,651) 797 (1) "Net impairments (net reversals of impairments) of investments in subsidiaries", "Net reversals of impairments (net impairments) of current accounts" and "Receivables written off" can be broken down as follows: Net impairments (net reversals of impairments) of investments in subsidiaries Net reversals of impairments (net impairments) of current accounts NRJ 12 SARL BOILEAU TV SAS SOCIETE DE TELEVISION LOCALE SAS OTHER COM- PANIES 31/12/2012 (1,823) (299) (2,122) 3,571 (1,644) (9) 1,918 Receivables written off (36,000) (2,150) (38,150) Total (36,000) (402) (1,644) (308) (38,354) Note 18 - Exceptional income (expense) In 2012, the (85,000) in exceptional items corresponded to: net capital gains on sales of fixed investments (treasury shares) for 14,000, employee-related benefits for (126,000), tax fines and penalties for (3,000). tax adjustments other than corporate income tax for 30,

180 For reference, in 2011, 1,657,000 in exceptional income was recorded, corresponding to: 1,529,000 in net capital gains from the disposal of investments in subsidiaries, including 1,596,000 in capital gains from the disposal of NRJ MOBILE SAS securities and 67,000 in capital losses on the disposal of other investments in subsidiaries, 1,076,000 in reversals of unused provisions relating to staff, (801,000) in employee-related benefits, (147,000) in tax fines and penalties. Note 19 - Corporate income tax At 31/12/2012 Before tax Tax due Net income Recurring income (1) (43,016) (43,016) Exceptional income (expense) short term (2) (99) (99) Employee profit sharing (3) Net income tax benefit (4) 10,501 10,501 Total = (1) + (2) - (3) + (4) (43,674) 10,501 (33,173) The net income tax benefit breaks down as follows: Net income tax benefit 31/12/2012 Net tax savings under the tax consolidation regime for 2012 a 9,868 Tax credit 3 Tax balance relating to the tax consolidation regime for Total 10,501 a For information, the total income of tax-consolidated companies for 2012 amounted to million taxed at the standard rate, giving a tax charge of million (including the social and exceptional contribution tax on profits and the tax credit). Under the consolidated taxable income system, rescinded on 1 January 2011, consolidated income for 2010 is currently subject to an inspection by the French tax authorities. This inspection began in March OTHER INFORMATION Note 20 - Debt maturity Gross amount Due within one year Borrowings and financial debt 1 1 Trade payables 3,786 3,786 Staff and welfare agencies 4,082 4,082 Due in more than one year State 22,209 1,001 21,208 1 Group and associates 3,917 3,917 Other debt Total 34,714 13,506 21,208 1 Under the consolidated taxable income system, rescinded on 1 January 2011, potential repayments of tax savings totalled 21,208,

181 Note 21 - Receivables maturity Gross amount Due within one year Due in more than one year Other financial assets 3,016 2, Receivables from subsidiaries 222, ,372 Trade receivables 5,080 5,080 Staff and welfare agencies State 3,411 3,411 Group and associates 2,386 2,386 Other receivables Deferred charges Total (gross) 236,580 13, ,892 Note 22 - Various items relating to subsidiaries and associates Related companies ASSETS Financial assets Investments in subsidiaries 1,853,014 Receivables from subsidiaries 222,372 Receivables Trade receivables and related 4,800 Other receivables 2,386 LIABILITIES Payables Trade payables 6,131 INCOME STATEMENT Operating income Revenues 20,565 Operating expenses Subcontracting 469 Rents and property service charges 2,189 Maintenance 458 Fees to intermediaries 8 Publications and public relations 186 Transportation and travel 6 Royalties 179 Financial income Income from subsidiaries 300 Reversal of provisions and depreciation 3,607 Other financial income 1,550 Financial expenses Depreciation, amortisation and provisions 3,812 Receivables written off 38,150 Other financial expenses

182 Note 23 - Amounts payable 31/12/ /12/2011 TRADE PAYABLES Invoices not yet received 1,613 2,438 TAX AND EMPLOYMENT-RELATED LIABILITIES State and welfare agencies 24,736 26,952 OTHER DEBTS Various accrued expenses 147 Total 26,349 29,537 Note 24 - Commitments given Commitments relating to business operations 1 year > 1 year and 5 years > 5 years 31/12/2012 Operating leases , ,412 TOTAL 861 3, ,412 1 Operating lease agreements: these commitments have been valued on the basis of minimum future payments for non-cancellable operating leases that were still in effect at the financial year-end. They mainly relate to leased properties. Retirement-related commitments At year-end, NRJ GROUP's pension commitments came to 489,000. These commitments are determined in line with the projected credit unit method, as recommended by IAS 19. The main assumptions used to evaluate these commitments were as follows: 1) Actuarial assumptions Set benefit entitlements based on the broadcasting industry s collective bargaining agreement, Discount rate: 3.20%, Mortality tables: INSEE 06/08 F and INSEE 06/08 H. 2) Category assumptions Set benefit entitlements based on the broadcasting industry's collective bargaining agreement, Retirement age: 64 for executives and 62 for non-executives, Employer contribution rate: 43%, Staff turnover rate and rate of increase in wages: determined for each age bracket on the basis of observations from 2008 to Deposits and guarantees NRJ GROUP acts as a guarantor for its subsidiary NRJ 12 SARL in relation to: GLOBECAST France in respect of the primary transmission of the R6 multiplex on digital terrestrial television (five-year contract from 1 March 2010). This guarantee also covers any compensation payable for contract termination. The commitment given amounts to a maximum of 331,000 before tax and excluding any compensation for contract termination. TDF with a view to broadcasting the R6 multiplex on digital terrestrial television. The total amount that may be payable under this commitment corresponds to the share of the cost owed by NRJ 12 SARL to TDF for the duration of the contract, i.e. a maximum amount of 11.7 million before taxes and excluding any compensation for contract termination. 181

183 Note 25 - Commitments received In connection with the debt write-offs granted on 26 November 2012 to its two subsidiaries NRJ 12 SARL and BOILEAU TV SAS for a total of 38,150,000 (detailed in Note 1), NRJ GROUP is covered by, through to the annual general meeting for each of these two subsidiaries to approve the annual financial statements for 2022, a clause for clawbacks in the event of an improvement in the fortunes of these companies concerning the total amounts written off. Note 26 - Disputes NRJ GROUP is involved in a number of inspections, lawsuits or disputes in the ordinary course of its business. The expenses that may arise from these cases or disputes, and which are considered likely to occur by NRJ GROUP and its advisors, have had sufficient provisions made to cover them. Note 27 - Tax consolidation The net tax savings recognised by NRJ GROUP, the parent company of the tax consolidation group, amounted to million for the year ended 31 December The NRJ GROUP applied million in tax loss carryforwards resulting in tax savings that may have to be repaid to the relevant subsidiaries. As the Group does not expect to make any cash repayments, it has not recognised any provisions for this contingency (see 8.4.3, 'Accounting Principles, Rules and Policies'). Note 28 - Average headcount The average headcount breaks down as follows: 31/12/ /12/2011 Executive grade Administrative staff Total Note 29 - Information on directors' remuneration Directors are individuals who are or who were members of the Board of Directors at the financial year-end date: 31/12/ /12/2011 Salaries and other remuneration 1,289 1,169 Benefits in kind 3 3 Directors' fees Total 1,329 1,212 Note 30 - Individual training entitlement At 31 December 2012, a total of 8,713 unclaimed training hours had been credited to employees under the 'DIF' Individual Training Entitlement, compared with 8,239 at 31 December hours of training were claimed in 2012 (compared with 655 hours in 2011). Note 31 - Consolidation NRJ GROUP SA is the parent company of the NRJ Group. Note 32 - Events since the year-end To the company s knowledge, no significant events likely to affect its financial position or profit have occurred since the financial year end. 182

184 8.5 COMPANY'S FINANCIAL RESULTS OVER THE PAST FIVE YEARS (in 000s, unless otherwise stated) 31/12/ /12/ /12/ /12/ /12/2012 SHARE CAPITAL AT YEAR END Share capital Number of shares 86,193,004 83,086,030 83,086,030 83,086,030 81,081,535 REVENUES AND INCOME FOR THE YEAR Revenues before taxes 25,744 20,257 21,713 22,363 20,810 Income before tax, employee profit sharing and calculated expenses 91,747 1,043 (5,565) 2,282 (37,159) Corporate income tax (3,360) (12,535) (9,887) (9,473) (10,501) Employee profit-sharing due for the year Income after tax, employee profit sharing and calculated expenses (215,343) (32,355) 8,107 9,932 (33,173) Distributed income NA 16,617 (1) 24,926 (1) 24,926 (1) NA (2) EARNINGS PER SHARE ( ) Earnings after tax and employee profit sharing, but before calculated expenses Income after tax, employee profit sharing and calculated expenses (0.34) (2.50) (0.39) (0.41) Dividends paid (excluding tax credit) NA (1) NA (2) STAFF Average headcount over the year Total payroll for the year 9,744 6,697 9,491 11,239 8,201 Total employee benefits paid during the year 4,128 2,984 4,212 4,172 3,519 (1) Dividend payment drawn from the issue premium account. (2) In accordance with the draft resolution proposed at the General Shareholders Meeting convened to approve the financial statements for the year ended 31 December

185 8.6 INDEPENDENT AUDITORS' REPORT ON THE ANNUAL FINANCIAL STATEMENTS To the Shareholders, In accordance with the assignment entrusted to us by your Annual General Meeting, we hereby present our report for the financial year ended 31 December 2012, on: - the audit of the accompanying annual financial statements of NRJ GROUP; - the justification of our opinion; - the specific verifications and disclosures required by law. The consolidated financial statements were approved by the Board of Directors. Our role is to express an opinion on these financial statements based on our audit. I. Opinion on the annual financial statements We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes an examination, using sampling or other selection methods, of evidence supporting the amounts and disclosures in the annual financial statements. It also includes an assessment of the accounting policies applied and of any significant estimates made, as well as an evaluation of the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and provides a reasonable basis for our opinion. In our opinion, the financial statements for the financial year under review, under French accounting standards, provide a true and fair view of the results of operations during the last financial year, and of the financial position, assets and liabilities of the company at the end of that financial year. II. Justification of our opinion The accounting estimates used to prepare the financial statements for the year ended 31 December 2012 were formulated in a persistently uncertain environment which makes it difficult to predict future business trends, as indicated in Note to the annual financial statements. In view of these circumstances, and pursuant to Article L of the French Commercial Code regarding the justification of our opinion, we draw your attention to the following information: Financial assets on the balance sheet are valued according to the method described in the 'Financial assets' section of Note regarding accounting principles, rules and policies. Our role was to assess the data and assumptions underlying these estimates, and to review the valuations made by the company. These assessments were made as part of our audit of the annual financial statements, taken as a whole, and therefore contributed to the opinion we formed, which is expressed in the first part of this report. III. Specific verifications and disclosures We also performed, in accordance with professional standards generally accepted in France, the specific verifications required by law. We have no matters to report regarding the fair presentation and the consistency with the annual financial statements of the information provided in the Board of Directors management report and in the documents provided to shareholders with respect to the company s financial position and annual financial statements. Concerning the information provided in accordance with the requirements of Article L of the French Commercial Code relating to compensation and benefits received by the Directors and any other commitments made in their favour, we have verified its consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company from companies controlling your Company or controlled by it. Based on these investigations, we confirm the accuracy and fair presentation of this information. In accordance with legal requirements, we have ensured that the various disclosures regarding the identity of shareholders and holders of voting rights have been provided to you in the management report. Neuilly-sur-Seine, 28 March 2013 The Independent Auditors PricewaterhouseCoopers Audit Laurent Daniel Deloitte & Associés Bertrand Boisselier 184

186 9 ORDINARY GENERAL MEETING ON 28 MAY AGENDA Board of Directors' and Chairman's reports, Independent Auditors' reports on the annual and consolidated financial statements, Approval of operations, annual financial statements and non-tax deductible expenses or charges for the year ended 31 December 2012; discharge for the directors, Approval of the consolidated financial statements for the year ended 31 December 2012, Appropriation of income for the year, Independent Auditors special report on regulated agreements and commitments, and approval of these agreements, Authorisation to be granted to the Board of Directors to enable the Company to buy back its own shares pursuant to the terms of Article L of the French Commercial Code, authorisation period, purposes, conditions, maximum limit, Authority to carry out formalities. 9.2 SUMMARY OF RESOLUTIONS Summary of reasons behind resolutions submitted to the Ordinary General Meeting APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS FOR 2012 AND APPROPRIATION OF INCOME The first items on the agenda relate to the approval of the annual and consolidated financial statements for We propose that you approve the annual financial statements for the year ended 31 December 2012, with a loss of 33,172,753, and the consolidated financial statements for the year ended 31 December 2012, with a profit (Group share) of 37,098,765. We also propose that you approve the overall amount of expenses and charges covered by Section 4 of Article 39 of the French General Tax Code, i.e. the sum of 1,741 and the corresponding tax charge. The appropriation of our Company's earnings that we are recommending is compliant with French law and our bylaws. A motion will be put forward to shareholders to allocate the loss for the year to retained earnings and draw a sum exceeding one tenth of the share capital from the legal reserve account. APPROVAL OF REGULATED AGREEMENTS The next items on the agenda include the approval of the regulated agreements outlined in the Independent Auditors' special report. Namely with regard to new agreements: An amendment relating to the NRJ GROUP employment contract of Mrs Maryam Salehi, Director and Vice- Chairman of General Management, setting out the terms of her fixed and variable remuneration for 2012 (authorised by the Board of Directors on 15 March 2012), An amendment relating to the NRJ GROUP employment contract of Mrs Maryam Salehi, Director and Vice- Chairman of General Management, setting out the terms of her fixed and variable remuneration for 2013 (authorised by the Board of Directors on 21 January 2013) Payment of exceptional remuneration to Mrs Maryam Salehi, Director and Vice-Chairman of General Management, in relation to 2012 (authorised by the Board of Directors on 19 March 2013). AUTHORISATION TO IMPLEMENT A SHARE BUYBACK PROGRAMME We propose that you grant the necessary authorisation to the Board of Directors, for a period of 18 months, to purchase the Company s shares, on one or more occasions and at such times as it deems appropriate, subject to a maximum limit of 10% of the number of shares comprising the Company s share capital, adjusted where appropriate to take into account any increases or reductions in the share capital that may occur during the period of the share buyback programme. 185

187 This authorisation would cancel the prior authorisation granted by the Combined Annual General Meeting of 10 May 2012 under the twelfth ordinary resolution (see paragraph 6.2.6, purchases made in 2012 under authorisations granted by the General Meetings on 12 May 2011 and 10 May 2012). The Company s shares may be purchased with a view to: Stimulating the secondary market or ensuring that liquidity is provided for NRJ GROUP shares by an investment services provider under a liquidity agreement that complies with the AMAFI (French Financial Markets Association) Code of Conduct approved by the AMF (French Financial Markets Authority); Holding the shares purchased for the purpose of subsequently exchanging them or using them as consideration for potential acquisitions, in which case the number of shares purchased for this purpose may not exceed 5% of the Company's share capital; Covering stock option plans and/or bonus share plans (or related plans) for the Group's employees and/or corporate officers, in addition to all allocations of shares in connection with a company or group savings scheme (or related scheme), employee profit-sharing arrangements and/or all other forms of share-based awards to the Group's employees and/or corporate officers; Covering options and marketable securities entitling holders to access the capital, in accordance with applicable regulations; Cancelling the shares purchased, if required, in accordance with the authorisation granted by the Combined General Meeting of 10 May 2012 under the thirteenth extraordinary resolution. The shares may be purchased by any means and at any time, including during a public offering period, but in strict compliance with applicable stock market regulations. The Company reserves the right to use options and derivative instruments in accordance with applicable regulations. We therefore propose that you set the maximum purchase price at 15 per share. Accordingly, the maximum theoretical amount of any transactions under this authorisation would be 121,622, DRAFT RESOLUTIONS First resolution - Approval of operations, annual financial statements and non-tax deductible expenses or charges for the year ended 31 December 2012; discharge for the directors The Annual General Meeting, having considered the reports of the Board of Directors, the Chairman of the Board and the Independent Auditors on the financial year ended 31 December 2012, approves, as presented, the annual financial statements for the year then ended, which show a loss of 33,172,753. It also approves the transactions reflected in these financial statements or summarised in these reports. The Annual General Meeting specifically approves the total amount of 1,741 in respect of expenses and charges referred to in paragraph 4 of Article 39 of the French General Tax Code, together with the corresponding tax charge. The General Meeting gives the directors full and unconditional discharge for their management during Second resolution - Approval of the consolidated financial statements for the year ended 31 December 2012 The Annual General Meeting, having considered the reports of the Board of Directors, the Chairman of the Board and the Independent Auditors on the consolidated financial statements for the year ended 31 December 2012, approves the financial statements, as presented, which show a profit (Group share) of 37,098,765. Third resolution - Appropriation of income for the year The Annual General Meeting, pursuant to a motion by the Board of Directors, resolves to allocate earnings for the year ended 31 December 2012 as follows: Source - Loss for the year (33,172,753) - Retained earnings (12,297,947) - Deduction from "legal reserve" account (for the fraction exceeding one tenth of the share capital), i.e. 2,004 Allocation - Retained earnings (45,468,696) 186

188 Pursuant to Article 243 bis of the French General Tax Code, the Annual General Meeting duly notes that the following dividends and income were distributed during the last three financial years: Financial year INCOME ELIGIBLE FOR TAX ALLOWANCE DIVIDENDS OTHER DISTRIBUTED INCOME INCOME NOT ELIGIBLE FOR TAX ALLOWANCE * Including amounts corresponding to dividends not distributed due to treasury shares (allocated to retained earnings). 16,617, * i.e per share 24,925, * i.e per share 24,925, * i.e per share Fourth resolution - Independent Auditors' special report on regulated agreements and commitments, and approval of these agreements Having considered the Independent Auditors' special report on regulated agreements and commitments, as presented, the Annual General Meeting approves the new agreements mentioned therein. Fifth resolution - Authorisation to be granted to the Board of Directors to enable the Company to buy back its own shares pursuant to the terms of Article L of the French Commercial Code The Annual General Meeting, having considered the report of the Board of Directors, grants authority to the latter, for a period of 18 months, pursuant to Articles L et seq of the French Commercial Code, to purchase the Company's shares, on one or more occasions and at such times as it deems appropriate, subject to a maximum limit of 10% of the number of shares comprising the Company's share capital, adjusted where appropriate to take into account any increases or reductions in the share capital that may occur during the period of the share buyback programme. This authorisation cancels the prior authorisation granted to the Board of Directors by the Combined Annual General Meeting of 10 May 2012 under the twelfth ordinary resolution. The Company's shares may be purchased with a view to: - Stimulating the secondary market or ensuring that liquidity is provided for NRJ Group shares by an investment services provider under a liquidity agreement that complies with the AMAFI (French Financial Markets Association) Code of Conduct approved by the AMF (French Financial Markets Authority); - Holding the shares purchased for the purpose of subsequently exchanging them or using them as consideration for potential acquisitions, in which case the number of shares purchased for this purpose may not exceed 5% of the Company's share capital; - Covering stock option plans and/or bonus share plans (or related plans) for the Group's employees and/or corporate officers, in addition to all allocations of shares in connection with a company or group savings scheme (or related scheme), employee profit-sharing arrangements and/or all other forms of share-based awards to the Group's employees and/or corporate officers; - Covering options and marketable securities entitling holders to access the capital, in accordance with applicable regulations; - Cancelling the shares purchased, if required, in accordance with the authorisation granted by the thirteenth extraordinary resolution of the Combined Annual General Meeting of 10 May The shares may be purchased by any means, including purchases of blocks of shares, and at the times that the Board of Directors deems appropriate. These purchases may occur during a public offering period, subject to compliance with applicable regulations. The Company reserves the right to use options and derivative instruments in accordance with applicable regulations. The maximum purchase price shall be set at 15 per share. In the event of transactions affecting the share capital, in particular stock splits or reverse stock splits, or allotments of bonus shares, the aforementioned amount shall be adjusted proportionately (i.e. multiplied by the ratio of the number of the shares in issue before the transaction, to the number of shares in issue after the transaction). The maximum amount of any transactions under this authorisation shall therefore be 121,622,295. The Annual General Meeting grants all necessary powers to the Board of Directors to carry out these transactions, to determine the terms and conditions thereof, to enter into all necessary agreements and to complete all formalities required. Sixth resolution - Authority to carry out formalities The Annual General Meeting grants all necessary powers to the bearer of the minutes of this meeting, or of a copy or extract thereof, to complete all filing and registration formalities required by law. 187

189 9.4 INDEPENDENT AUDITORS SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS To the Shareholders, In our capacity as Independent Auditors of NRJ Group, we hereby present our report on your company s regulated agreements and commitments. Our role is to inform you, based on the information provided to us, of the principal terms and characteristics of the agreements and commitments of which we have been informed or which we encountered in the course of our assignment, without passing judgement on their relevance or validity, or seeking out the possible existence of other agreements or commitments. It is your responsibility, under the terms of Article R of the French Commercial Code, to evaluate the potential benefit of entering into such agreements and commitments with a view to approving them. As relevant, it is also our responsibility to provide you with the information required under Article R of the French Commercial Code relative to the implementation during the past year of any agreements and commitments already approved by the General Meeting. We carried out the checks that we deemed necessary with respect to the professional standards of the French Association of Independent Auditors (Compagnie Nationale des Commissaires aux Comptes) as applicable to this assignment. Those standards require us to verify that the information we have been given is consistent with the original documents from which it is derived. AGREEMENTS AND COMMITMENTS SUBMITTED FOR APPROVAL AT THE GENERAL MEETING Agreements and commitments authorised during the year under review Pursuant to Article L of the French Commercial Code, we have been advised of the following agreements and commitments that have obtained prior authorisation from your Board of Directors. Agreements with Mrs Maryam Salehi An amendment was signed relating to the employment contract of Mrs Maryam Salehi, Director and Vice-Chairman of General Management, and setting out the terms of Mrs Salehi's fixed and variable remuneration for 2012, as authorised by the Board of Directors on 15 March 2012: Gross annual fixed remuneration of 190,000; Gross variable remuneration of 160,000 based on a quantitative criterion relating to the Group's performance, i.e. achieving the level of current EBIT before barters budgeted for; Gross exceptional variable remuneration of 220,000 based on a quantitative criterion relating to the Group's performance, i.e. achieving the level of current EBIT defined by the Board of Directors. Under this employment contract, Mrs Maryam Salehi received a gross salary of 570,547.67, including 190, in respect of her fixed annual salary and 380,000 in respect of her variable remuneration for Agreements and commitments authorised since the financial year-end We have been advised of the following agreements and commitments, authorised since the financial year-end, which have been previously authorised by your Board of Directors. Agreements with Mrs Maryam Salehi - An amendment was signed relating to the employment contract of Mrs Maryam Salehi, Director and Vice- Chairman of General Management, setting out the terms of her fixed and variable remuneration for 2013, as authorised by the Board of Directors on 21 January 2013: Gross fixed remuneration of 210,000 per year; Gross variable remuneration of 160,000 based on a quantitative criterion relating to the Group's performance, i.e. achieving the level of current EBIT before barters budgeted for; Gross exceptional variable remuneration of 210,000 based on a quantitative criterion relating to the Group's performance, i.e. achieving the level of current EBIT defined by the Board of Directors. - Payment of 80,000 of gross exceptional remuneration to Mrs Maryam Salehi, Director and Vice-Chairman of General Management (authorised by the Board of Directors on 19 March 2013) in relation to

190 AGREEMENTS AND COMMITMENTS ALREADY APPROVED BY THE GENERAL MEETING Agreements and commitments approved in prior years and still in force during the year under review Pursuant to Article R of the French Commercial Code, we have been informed that the following agreements and commitments, already approved by the Annual General Meeting in prior years, remained in force during the year under review. Brand licensing agreement Under this agreement, NRJ GROUP has granted NRJ SAS an exclusive licence to operate the NRJ brands in France and internationally. The corresponding royalties for the year ended 31 December 2012 amounted to 2,787, inclusive of taxes. Neuilly-sur-Seine, 28 March 2013 The Independent Auditors PricewaterhouseCoopers Audit Laurent Daniel Deloitte & Associés Bertrand Boisselier 189